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Highlights
- CVS Health Corporation (NYSE:CVS) revenue rose 10% YoY to US$73.8 in Q3.
- Humana Inc. (NYSE:HUM) revenue rose 3% to US$20.7 billion in the third quarter.
- Both the companies have revised their full-year 2021 revenue guidance.
CVS Health Corporation (NYSE:CVS) and Humana Inc. (NYSE:HUM) on Wednesday raised their fiscal 2021 revenue guidance after strong third-quarter results.
The CVS stock was up 2.33% to US$93.275, while the HUM stock fell 1.79% to US$448.925 at 9:32 am ET after the results.
Third-Quarter Snapshot
CVS Health Corporation
CVS posted revenue of US$73.8 billion, up 10%, in the third quarter of 2021, compared to US$67.06 billion in the same period a year ago.
Its Health Care Benefits segment revenue increased 9.5%, Pharmacy Services segment revenue rose 9.3%, and Retail/LTC Segment revenue increased 10.0%, driven by demand for diagnostic testing, Covid-19 vaccinations, and prescription drugs.
The operating income was US$3.06 billion, down 5.8% YoY, primarily on account of a goodwill impairment charge in the Retail/LTC segment. Its adjusted operating income was US$4.07 billion, an increase of 12.5% YoY, due to the improved business in the pharmacy segment.
The GAAP earnings per share diluted was US$1.20, up 29.0%, and adjusted EPS was US$1.97, up 18.7%, compared to the previous year.
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Full-year Guidance
CVS expects GAAP EPS diluted to be in the range of US$6.13 to US$6.23 from US$6.35 to US$6.45 predicted earlier. The adjusted EPS is expected to be in the range of US$7.90 to US$8.00 from US$7.70 to US$7.80 in the previous estimate.
The cash flow from operations is expected to be in the range of US$13.0 billion to US$13.5 billion from US$12.5 billion to US$13.0 billion, estimated previously.
The Rhode Island-based company provides integrated healthcare services to its members, including pharmacy services.
The company has a market cap of US$120 billion, a P/E of 16.72, and a dividend yield of 2.21%.
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Source – Pixabay
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Humana Inc.
It posted third-quarter revenue of US$20.7 billion, an increase of 3%, compared to US$20.07 billion in the comparable period last year.
Its pretax income was US$1.6 billion against US$1.76 billion in Q3, 2020. The GAAP earnings per common share diluted were US$11.84, and adjusted EPS diluted was US$4.83. The operating cash flow stood at US$2.8 billion compared to US$1.8 billion in Q3 of the previous year.
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Full-year Guidance
Humana expects its full-year GAAP EPS to be around US$23.67 against the previous range of US$24.97 to US$25.47. The adjusted EPS to be around US$20.50 versus the previous guidance range of US$21.25 to US$21.75. Its 97% of Medicare Advantage members are currently enrolled in 4-Star and above contracts for 2022. The company expects an 11% growth YoY in individual Medicare Advantage membership in FY 2021.
The Louisville, Kentucky-based Humana offers health insurance products in the US market, focusing on government-sponsored programs, individual and group membership of Medicare advantage, and the military’s Tricare program. Humana has a current market cap of US$58 billion, a P/E of 24.16, and a dividend yield of 0.61%.
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Bottomline
The healthcare sector grew rapidly this year, helped by covid vaccine sales. CVS conducted over 8 million Covid-19 tests and administered 11 million covid doses in the third quarter. On the other hand, Humana beat Wall Street expectations after its insurance business grew in the quarter. However, investors should evaluate the companies carefully before investing in stocks.
