CVS Health Corp (NYSE:CVS) stock fell 1.30% (As on February 8, 11:13:38 AM UTC-4, Source: Google Finance) after the company reported a near doubling in profits over 2023 but cut guidance for the year ahead on the prospect of higher medical costs. For the year to December, net income almost doubled from US$4.33 billion to US$8.37 billion, aided by double-digit growth in CVS’ healthcare benefits and services businesses, which themselves benefitted from a boost in Obamacare enrollment.

Moreover, the Health Care Benefits segment total revenues increased 16.1% and 15.6% for the three months and year ended December 31, 2023, respectively, compared to the prior year driven by growth across all product lines. Medical membership as of December 31, 2023 of 25.7 million remained relatively consistent compared with September 30, 2023, as declines in the Medicaid product line were largely offset by increases in the Commercial and Medicare product lines. The Health Services segment total revenues increased 12.3% and 10.2% for the three months and year ended December 31, 2023, respectively, compared to the prior year primarily driven by pharmacy drug mix, growth in specialty pharmacy, brand inflation and the acquisitions of Oak Street Health and Signify Health. These increases were partially offset by continued pharmacy client price improvements. The Pharmacy & Consumer Wellness segment total revenues increased 8.6% and 7.5% for the three months and year ended December 31, 2023, respectively,

CVS in the fourth quarter of FY 23 has reported the adjusted earnings per share of $2.12, beating the analysts’ estimates for the adjusted earnings per share of $1.98, according to FactSet consensus. The company had reported the adjusted revenue growth of 11.9 percent to $93.81 billion in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $90.58 billion. Operating income decreased 7.8% in the three months ended December 31, 2023 compared to the prior year primarily due to $193 million of acquisition-related transaction and integration costs recorded in the current year and the absence of a pre-tax gain of $250 million on the sale of the Company’s wholly-owned subsidiary bswift LLC (“bswift”) recorded in the prior year.

Adjusted earnings per share will likely sit at US$8.30 for 2024, the healthcare firm said in a full-year earnings release, rather than as previously anticipated at US$8.50.

Cash flow guidance from operations was slashed from $12.5 billion to $12.0 billion meanwhile, as CVS said trends of higher medical costs were now being recognized.