CVS Health beats Q2 expectations after announcing 5,000 job cuts

CVS Health released its second-quarter financial results just a couple days after reports of massive job cuts at the pharmacy chain. The company topped expectations, despite profits sinking due to rising costs.

Overall, CVS Health’s net income plunged 37% to $1.9 billion. Adjusted earnings totaled $2.21 per share in the quarter. Total revenue grew 10% to $88.92 billion. Analysts expected earnings of $2.12 per share on $86.41 billion in revenue, according to FactSet.

“Our diversified business model delivered strong results this quarter,” CVS Health President and CEO Karen Lynch said in a statement on Wednesday, Aug. 2. “We continue to execute on our strategy to expand access to health services across our care delivery channels and strengthen our engagement with consumers to improve their health and well-being.”

Growth from the CVS Health’s largest business, pharmacy benefits management, softened hits the company took from both its insurance and drugstore segments. The company is still digesting a couple of multibillion-dollar acquisitions that aim to improve its ability to deliver more care and manage customer health.

“On May 2, 2023, [CVS] completed the acquisition of Oak Street Health, a leading multi-payor, value-based primary care company with approximately 600 primary care providers and more than 170 medical centers across 21 states,” the company said in a news release on the second-quarter results. “In July 2023, [CVS] announced the launch of Caremark® Cost Saver^TM to help lower pharmacy out-of-pocket drug costs for CVS Caremark clients’ members. Through the new program, eligible members will have automatic access to GoodRx’s prescription pricing to allow them to pay lower prices, when available, on generic medications in a seamless experience at the pharmacy counter.”

CVS Health also confirmed a Wall Street Journal report from Monday, July 31, that said the company would announce 5,000 job cuts. The company said the jobs affected are primarily corporate positions, and it doesn’t expect customer-oriented roles in stores, pharmacies and clinics to be affected in the layoff plan.