Investments to weigh on FY18 profit growth
Having only updated Q4 guidance on the 4th of January, CVS delivered a robust quarter, including a return to a positive comp and revenues above guidance in both segments. Operating margin in the PBM was one area of weakness. EPS was $0.03 above consensus and at the top-end of guidance, despite CVS guiding towards the low-end on Jan 4. The key update in the release however was regarding FY18 operating profit growth guidance. With $275m of tax benefit being allocated to strategic investments, operating growth is expected to be 250bps lower vs. the January guidance.CVS Health is a health company. The company's segments are: Pharmacy Services, which provides a range of pharmacy benefit management solutions, including plan design offerings and administration, formulary management, and retail pharmacy network management services; Retail/Long-Term Care (LTC), which sells prescription drugs and general merchandise, including over-the-counter drugs, provides health care services through its MinuteClinic? walk-in medical clinics and conducts LTC pharmacy operations; and Health Care Benefits, which provides a range of voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental and behavioral health plans.
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