CVS HealthWall Street beat Wall Street’s estimates for its first quarter earnings on Wednesday. It also raised its guidance year-end, as it witnessed increased demand for prescriptions while Covid testing fell.

According to the company, adjusted earnings per share will range between $8.20 and $8.40 in 2022, compared to its earlier forecasts of $8.10-8.30.

Premarket trading saw shares rise by almost 2%

This is what Refinitiv’s analysts surveyed the company to determine what they expected from the company for the period ending March 31.

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

This year, the net income for health care company was $2.31 billion or $1.74 per share. It is higher than that of $1.68 per share in the previous year (2.22 billion).

CVS’s share price was $2.22, which excludes items. This is higher than Refinitiv surveyed analysts to estimate that $2.15 per share is the average.

From $76.83 billion, revenue increased $69.1 billion a year earlier. Analysts had expected $75.39 billion. This was either more or less than it actually was.

CVS has been the first choice for customers seeking Covid vaccines and tests during pandemics. It is now focused on finding other methods to attract foot traffic, increase sales, and combat online competition. The company has increased the number of health-care services available in its retail stores, and encourages members of Aetna’s health insurance to visit its drugstores to receive medical treatment.

CVS reported a decline in pandemic-related service demand during the quarter. In the first quarter, it administered over 6 million Covid test results and 8 million Covid vaccinations. It was able to administer more than 8 million Covid testing and 20 million Covid vaccines over the same period in the fourth quarter.

Consumers are now purchasing over-the-counter testing kits instead of buying Covid test strips at pharmacies. CVS pointed to those as a sales driver in the quarter — but did not specify how many it sold.

CVS’s same-store sales grew by 10.7% during the first quarter of this year compared to last year. Same-store sales in pharmacies increased 10.1%, while same-store sales in front stores rose 13.2%.

CVS reported that it had attracted more customers and filled more prescriptions. It also saw an increase in common cold, flu, and cough seasons during the quarter. Because they used masks more often and spent less time in their homes, shoppers were less likely to seek medication for seasonal ailments during the previous year. It also reported that pharmacy brand inflation had led to increased sales.

The company stated that sales increases have been partially offset by new generic drugs and reimbursement pressures in the pharmacy segment. Also, there was a decrease in Covid test demand.

Due to an agreement between CVS (the state of Florida) to settle the opioid claims against CVS for $484million, operating income at the company suffered a decline of 2.4%. This settlement will be payable over an 18-year span.

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. The company’s market capitalization has risen to $126.04 million with the closing of shares at $95.98 on Tuesday.

Check out the press release from the company here.

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