CVS Health Corporation reported financial results for the fourth quarter and full year of 2024, highlighting challenges within its insurance segment.
The company’s Aetna health insurance unit experienced increased medical costs and lower Medicare Advantage star ratings, which affected overall profitability.
For the fourth quarter, CVS Health reported a profit of $1.64 billion, or $1.30 per share, compared to $2.05 billion, or $1.58 per share, in the same period the previous year. Adjusted earnings were $1.19 per share, exceeding analyst expectations of $0.89. The company’s revenue for the quarter reached $97.71 billion, surpassing the projected $97.06 billion.
For the full year, adjusted earnings per-share declined to $5.42 from $8.74. Revenue increased by 4.2% to $372.8 billion. Generated cash flow from operations was $9.1 billion.
“We have continued to see growth in key areas of our business, including the Pharmacy and Consumer Wellness segment, while we address the industry-wide challenges that have impacted our Health Care Benefits segment,” said David Joyner, CVS Health president and CEO.
The insurance segment, which covers nearly 27 million individuals through Aetna, faced higher medical costs due to an increase in newly enrolled members in Medicare plans. The rising costs, along with lower Medicare Advantage star ratings, contributed to a decline in the unit’s performance. The medical loss ratio, a key indicator of insurance profitability, remained elevated despite some improvement from the previous quarter, staying above the preferred 80% threshold.
In response, CVS Health is implementing cost-cutting measures and leadership changes as part of its strategic realignment under Joyner, who became CEO in October. The company is also in the process of closing over 1,100 retail stores as part of broader efforts to optimize operations.
For 2025, CVS Health has provided an adjusted earnings forecast of $5.75 to $6.00 per share, aligning with market expectations. The company remains focused on addressing cost pressures in its insurance division while continuing to integrate its healthcare services to deliver value to customers, members, and shareholders.
