CVS blows past estimates, hikes outlook as insurance business outperforms 

CVS Health on Wednesday blew past first-quarter earnings and revenue estimates and raised its 2026 guidance, as its once-troubled insurance business showed improvement. 

CVS, which operates the nation’s largest pharmacy chain, sees full-year profit coming in between $7.30 and $7.50 per share. That’s up from a previous guidance of $7 to $7.20 per share. 

The company also expects revenue of at least $405 billion in 2026, up from its prior outlook of at least $400 billion. 

The majority of that $5 billion increase is “reflective of the tailwinds we’re seeing” for insurer Aetna, CVS CFO Brian Newman said in an interview with CNBC.

All of the health-care giant’s business segments, including insurance, its retail pharmacy and health services unit, surpassed Wall Street’s revenue expectations. But Aetna’s results are likely top of mind for investors, who have watched high medical costs batter major health insurers for the last two years. 

The results indicated continued progress in CVS’s broader turnaround plan, which has involved cutting $2 billion in costs, closing underperforming stores, shuffling leadership and reducing costs within privately run Medicare Advantage plans.

“From an investor lens, we said let’s put out realistic, reasonable targets and then find pathways to outperform. And we did that throughout at the end of last year and the quarter,” Newman said. “So to beat and raise, which I think is probably the fourth or fifth consecutive, it feels like we’re delivering on that.”

“So confident in the year, but still taking a cautious or prudent view,” he added, noting that medical costs are still too high.

Shares of CVS rose more than 4% in premarket trading on Wednesday.

Here’s what CVS reported for the first quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: 

• Earnings per share: $2.57 adjusted vs. $2.20 expected
• Revenue: $100.43 billion vs. $95.09 billion expected

The company posted net income of $2.94 billion, or $2.30 per share, for the first quarter. That compares with net income of $1.78 billion, or $1.41 per share, for the same period a year ago. 

Excluding certain items, such as restructuring charges and capital losses, adjusted earnings were $2.57 per share for the quarter.

CVS booked sales of $100.43 billion for the first quarter, up 6.2% from the same period a year ago, as all three of its business segments showed growth. 

CVS’s report also adds to an overall solid first quarter for the broader health insurance sector, though the second quarter will prove even more crucial for those companies as they get a clearer read on medical costs. 

The insurance business brought in $35.97 billion in revenue during the quarter, up around 3% from the first quarter of 2025. That came in higher than the $33.28 billion that analysts were expecting, according to StreetAccount. 

Newman attributed the quarter’s performance to Aetna’s underlying strength, citing organizational changes to processes or technology that have enabled the company to “do things more efficiently.”

Aetna and other insurers have grappled with higher-than-expected medical costs over the past year as more Medicare Advantage patients return to hospitals for procedures they delayed during the pandemic. Medical costs remain high, but Aetna and other insurers appear to be becoming better equipped to manage the trend, as many cut membership and benefits for patients and exit unprofitable markets. 

The insurance segment’s medical benefit ratio — a measure of total medical expenses paid relative to premiums collected — decreased from the prior year to 84.6% from 87.3%. A lower ratio typically indicates that a company collected more in premiums than it paid out in benefits, resulting in higher profitability.

Analysts expected a ratio of 86.3%, according to StreetAccount. 

Newman said medical costs are not improving, but CVS has internal programs to “take cost out of the way we do work.” He noted that the company can better forecast medical cost trends, saying he is happy “we’re not getting a lot of surprises.”

But Newman said CVS now needs to focus on using the same tools to reduce medical costs.

In a release, CVS also said the year-over-year improvement in the unit was due to the lack of a so-called premium deficiency reserve, which was recorded in the same period in 2025. That refers to a liability that an insurer may need to cover if future premiums are not enough to pay for anticipated claims and expenses.

CVS’s pharmacy and consumer wellness division posted $31.99 billion in sales for the first quarter, relatively flat from the year-ago period. Analysts expected sales of $31.70 billion, StreetAccount estimates said. 

That unit dispenses prescriptions in CVS’s more than 9,000 retail pharmacies and provides other services, such as vaccinations and diagnostic testing.

The company’s health services segment generated $48.24 billion in revenue for the quarter, up 11% from the same period a year earlier.

That unit includes the pharmacy benefits manager Caremark, which negotiates drug discounts with manufacturers on behalf of insurance plans, creates lists of medications, or formularies, that are covered by insurance, and reimburses pharmacies for prescriptions.