Removing one time costs and benefits, earnings were $1.19 per share, easily topping the 89 cents per share that analysts surveyed by Zacks Investment Research predicted.
Shares climbed more than 11% before the market opened Wednesday.
While the profit blew past expectations, it was short of the same period last year, which CVS blamed on increased medical costs in its insurance division, and lower Medicare Advantage star ratings for the 2024 payment year.
CVS Health Corp., based in Woonsocket, Rhode Island, runs one of the nation’s largest drugstore chains and a huge pharmacy benefit management business that operates prescription drug coverage for employers, insurers and other big clients. It also covers nearly 27 million people through its Aetna insurance arm.
The health care giant has been hurt by pressure from the Medicaid coverage it manages in several states as well as rising costs from its Medicare Advantage business, which involves privately run versions of the federal government’s coverage program mainly for people age 65 and older.
On the drugstore side, CVS Health is wrapping up a multi-year plan that includes the closure of more than 1,100 stores.
Quarterly revenue totaled $97.71 billion. That beat the $97.06 billion Wall Street was calling for.
Looking ahead, CVS Health foresees full-year adjusted earnings in a range of $5.75 to $6 per share. Analysts polled by FactSet expect $5.86 per share.
CVS Health is trying to move past a rough 2024 in which the company cut its forecast several times and saw its stock price tumble about 43%.
Former CEO Karen Lynch stepped down last October and was replaced by company executive David Joyner.
About a month later, the company added four new board members. They included the CEO of shareholder Glenview Capital Management, a hedge fund that has criticized the company for operating below its potential.
Glenview holds about 1% of the company’s outstanding shares, according to FactSet.