Profit Booster

Image source: Unsplash - Mykenzie Johnson

What's going on?

CVS reported better-than-expected earnings on Wednesday, as the healthcare giant’s shots do wonders for American shoppers and its own bank balance.

What does this mean?

Coronavirus vaccines are still in high demand in the US, with Delta still on the prowl and booster shots now the must-have winter accessory. And CVS has been more than happy to provide: the company administered 9 million vaccines last quarter, which helped push up retail revenue by 10% versus the same time last year (tweet this). Whats more, a rise in visits to the doctor has meant more prescriptions for CVS to fill, which boosted its pharmacy revenue by a tidy 9%.

All in all, that brought overall revenue up 10% last quarter. And CVS doesnt think thatll dry up anytime soon: the US authorized the Pfizer vaccine for kids aged five to eleven this week, which might just be why it raised its full-year profit outlook. Investors were impressed: they sent CVSs stock up 5% after the news.

Why should I care?

The bigger picture: The best of both.
CVS is actually an integrated healthcare provider, meaning it both sells drugs and offers health insurance services. Thats proved forward-thinking: the pandemic has, after all, boosted retail revenue through vaccines and tests, even as its increased costs for its insurance business. Pure-play companies like Humana havent been so lucky: the health insurance firm announced on Wednesday that Covids hurt its bottom line, and its stock initially fell 7%.

Zooming in: CVS is innovating.
CVS has something else up its sleeve: the companys increasingly been linking its different healthcare offerings with one another encouraging its health insurance members to visit its clinics, say. Its also just launched a virtual care service, allowing customers to see a doctor around the clock. That could be a shrewd move: McKinsey reckons the US telehealth industry will grow from its 2019 revenue of $3 billion to as much as $250 billion.

Originally posted as part of the Finimize daily email.

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