UPDATE: CVS Health just announced third-quarter earnings that exceeded expectations, but shares fell over 3% in premarket trading due to a staggering $3.99 billion net loss linked to a $5.7 billion goodwill impairment charge on July 9, 2025. This marks a pivotal moment as CEO David Joyner undertakes bold measures to revive the struggling drugstore chain.
Despite the loss, CVS reported adjusted earnings of $1.60 per share, surpassing analyst estimates of $1.37. Revenue for the quarter reached $102.87 billion, significantly higher than the anticipated $98.85 billion. Joyner expressed optimism, stating, “We feel really, really good about our ability to close out the year favorably,” as CVS raises its fiscal 2025 earnings outlook to $6.55 to $6.65 per share, up from $6.30 to $6.40.
The reported loss reflects ongoing challenges within the health care delivery segment, prompting management changes and a strategic reduction in new clinic openings. Joyner confirmed, “We’ve effectively made the decision this quarter to both slow the clinic growth and also close some of the underperforming clinics.” Notably, he announced the closure of 16 Oak Street Health locations.
CVS’s insurance unit showed signs of recovery, with revenue climbing to $35.99 billion, an increase of over 9% from the previous year, driven by improved performance in government health plans, including Medicare Advantage. The medical benefit ratio improved to 92.8% from 95.2%, indicating a more efficient balance between premiums collected and medical expenses paid.
In its pharmacy and consumer wellness division, CVS recorded $36.21 billion in sales, up 11.7% year-over-year, as higher prescription volumes offset reimbursement pressures. Analysts had projected sales of $35.6 billion for this segment.
Joyner’s aggressive restructuring efforts, including executive reshuffles and cost management, have already yielded a remarkable 85% rise in CVS shares this year. The company is optimistic about sustained growth as it continues to adapt to an evolving health care landscape.
As CVS navigates these challenges, all eyes will be on its fourth-quarter performance and the effectiveness of its strategic plans. Investors and industry analysts are keenly watching how these developments will unfold in the coming months.
