CVS Well being beats earnings estimates, begins restructuring to chop prices

(Reuters) – CVS Well being Corp reported better-than-expected second-quarter earnings on Wednesday and stated it had begun a restructuring program to chop prices after a latest wave of acquisitions.

The corporate has expanded past medical insurance and pharmacies with its acquisitions of major care supplier Oak Road Well being and residential healthcare companies firm Signify Well being.

CVS Well being, which accomplished the acquisitions earlier this 12 months, has recognized higher-than-expected transaction and integration prices associated to the offers.

The corporate stated it recorded $496 million in pretax fees associated to a restructuring program it initiated through the quarter to scale back prices.

CVS, which has a big retail pharmacy chain, a well being insurer and a pharmacy profit administration (PBM) unit, stated it might pause acquisitions within the close to time period however might take a look at “extra alternatives” over an extended time period.

Excluding gadgets, the corporate reported earnings of $2.21 per share, above the typical analyst estimate of $2.11 per share, buoyed by the energy of the PBM unit, which negotiates drug costs with producers.

Gross sales in CVS’ well being companies phase, which incorporates the PBM unit, elevated 7.6% to $46.22 billion within the reported quarter in comparison with the prior 12 months.

(Reporting by Khushi Mandwara and Banvi Satja in Bengaluru; Modifying by Vinay Dwivedi)

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