CVS Health Corp reported third-quarter earnings and revenue that exceeded Wall Street expectations on Oct. 29, raising its adjusted profit outlook for fiscal 2025. The company cited stronger performance in its insurance business and steady growth across all divisions as key drivers.
CVS now expects adjusted earnings of $6.55 to $6.65 per share for 2025, up from its previous guidance of $6.30 to $6.40. This marks the third consecutive quarter in which the company has increased its outlook.
“We’ve had three straight quarters of beat and raise, and we feel confident about closing out the year favorably,” CEO David Joyner said.
Earnings and revenue performance
For the quarter, CVS Health Corp reported adjusted earnings per share of $1.60, surpassing analysts’ estimates of $1.37. Revenue rose 7.8% year over year to $102.87 billion, compared with expectations of $98.85 billion. The company recorded a net loss of $3.99 billion, or $3.13 per share, primarily due to a $5.7 billion goodwill impairment charge in its health-care delivery reporting unit.
CVS Health Corp said the impairment reflected continued challenges in its health-care delivery segment, which affected growth projections. The company has since reorganized the unit’s management team and scaled back its primary-care clinic expansion plans.
“We decided to slow clinic growth and close some underperforming sites,” Joyner said. CVS announced it will close 16 Oak Street Health primary-care locations, though Joyner added that the move “does not change our view of value-based care.”
Insurance unit leads recovery
The company’s insurance business, operated under Aetna, delivered $35.99 billion in revenue, a more than 9% increase from the same quarter last year. Analysts had projected $34.48 billion. CVS Health Corp attributed the growth to improvements in its government health plans, including Medicare Advantage and Medicare Part D, and the effects of the Inflation Reduction Act on premiums.
Aetna’s medical benefit ratio—a measure of claims costs versus premiums—improved to 92.8%, down from 95.2% a year earlier. Lower ratios typically indicate higher profitability.
“The transformation is clearly visible within our Aetna business after a challenging 2024,” Joyner said. CVS Chief Financial Officer Brian Newman added that medical cost trends remained “elevated but modestly favorable relative to expectations.”
Pharmacy and health services growth
The pharmacy and consumer wellness division generated $36.21 billion in revenue, up 11.7% year over year. Growth was driven by higher prescription volume, including from CVS Health Corp’s acquisition of prescriptions from Rite Aid, partially offset by reimbursement pressures.
“CVS Pharmacy delivered solid performance and continued to gain market share,” Joyner said. “This reflects the strength and scalability of our model.”
The health services segment, which includes pharmacy benefit manager Caremark, posted $49.27 billion in revenue, up 11.6% from the prior year. Analysts had expected $45.71 billion. Joyner described Caremark’s sales season as “really good,” pointing to renewed momentum in negotiations with insurers and drug manufacturers.
Strategic shifts and outlook
This quarter marks Joyner’s first full year as CEO following Karen Lynch’s tenure. He has focused on cutting costs, restructuring operations, and improving profitability across business units. CVS Health Corp and CVS pharmacy shares have risen more than 85% in 2025, reflecting investor confidence in the company’s turnaround strategy.
The company continues to streamline operations within its health-care delivery unit while maintaining long-term investment in insurance and pharmacy growth.
“We are encouraged by our strong performance this year and expect momentum to continue into next year,” Newman said.
CVS’s quarterly results indicate that its strategy of operational realignment and focus on core health services is beginning to yield results, even as it addresses challenges in the clinic network. With improving insurance margins and steady pharmacy demand, the company appears positioned for continued growth heading into 2026.
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