CVS Health on Wednesday outpaced Wall Street’s expectations for first-quarter earnings and raised its guidance for the year, as it saw demand for prescriptions and more, while demand for Covid vaccines and testing declined.

The health-care company said it now expects adjusted earnings per share for 2022 to range from $8.20 to $8.40 compared with its previous forecast of between $8.10 to $8.30.

Shares were up more than 1% in premarket trading.

Here’s what the company reported for the three-month period ended March 31, compared with what analysts were expecting, based on a survey of analysts by Refinitiv:

• Earnings per share: $2.22 adjusted vs. $2.15 expected
• Revenue: $76.83 billion vs. $75.39 billion expected

The health-care company reported net income of $2.31 billion, or $1.74 per share, higher than the $2.22 billion, or $1.68 per share, a year earlier.

Excluding items, CVS earned $2.22 per share, more than the $2.15 per share expected by analysts surveyed by Refinitiv.

Revenue increased to $76.83 billion from $69.1 billion a year earlier. That topped/fell short of analysts’ expectations of $75.39 billion.

Customers have turned to CVS drugstores during pandemic, seeking Covid tests and vaccines. Now, the company is focused on other ways to draw foot traffic, drum up business and stem competition from online retailers. It has added more health-care services to its stores and encouraged members of its health insurance business, Aetna, to go to its drugstores for medical care.

In the first quarter, CVS saw declining demand for pandemic-related services. It administered more than 6 million Covid tests and more than 8 million Covid vaccines in the three-month period. That compares to more than 8 million Covid tests and more than 20 million Covid vaccines in the fourth quarter.

Same-store sales at CVS grew 10.7% in the first quarter compared to the year-ago period. In the pharmacy, same-store sales rose 10.1% and in the front store, same-store sales increased 13.2%.

CVS said it attracted new customers, filled more prescriptions and saw a more typical cough, cold and flu season in the first quarter. In the year-ago period, fewer shoppers sought medications for seasonal illnesses as they wore masks and spent more time at home. The company said it also saw sales increase from pharmacy brand inflation.

Sales increases were partially offset by the introduction of new generic drugs, reimbursement pressure in the pharmacy segment and a drop in Covid testing demand, the company said.

As of Tuesday’s close, shares of CVS are down about 7% so far this year, outperforming the 12% decline of the S&P 500. Shares closed Tuesday at $95.98, bringing the company’s market value to $126.04 billion.

Read the company’s press release here.

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