CVS Reports Improving Earnings Reports But Slashes Guidance

Shares of CVS Health Corp dropped more than 14% in premarket trading on Tuesday after the drugstore chain cut its 2016 adjusted earnings forecast and gave downbeat projections for the coming fiscal year. The company cited slowing prescription growth and its integrated model as factors that caused fewer people to fulfill retail prescriptions at its pharmacies.

CVS cut its 2016 adjusted earnings forecast to $5.77-$5.83 per share from its prior forecast of $5.81-$5.89 per share.

For its third quarter, CVS reported a profit that was rose from the same period last year. The company said its bottom line rose to $1.75 billion, or $1.64 per share, up from $1.43 billion, or $1.28 per share, in last year’s third quarter.

The No. 2 U.S. drugstore chain by store count announced revenue for the quarter rose 15.5% to $44.62 billion, compared to $38.64 billion last year. The increase was helped by strong demand for its pharmacy benefit management services, but missed the average analysts’ estimate of $45.29 billion.

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