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Wednesday, 08/02/2023 8:07:44 AM

Wednesday, August 02, 2023 8:07:44 AM

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CVS Health (CVS) beats profit estimates, starts restructuring to cut costs
By: | August 2, 2023

(Reuters) - CVS Health Corp reported better-than-expected second-quarter earnings on Wednesday, and said it had begun implementing a restructuring program to cut costs after a recent spree of acquisitions.

The company has been expanding beyond health insurance and pharmacies with its buyouts of primary-care provider Oak Street Health and home healthcare services firm Signify Health.

CVS Health (NYSE:CVS), which completed the acquisitions earlier this year, has flagged higher-than-expected transaction and integration costs related to the deals.

The company said it recorded $496 million in pre-tax charges related to a restructuring program it started during the quarter to rein in costs.

CVS, which has a large retail pharmacy chain, a health insurance business and a pharmacy benefit management (PBM) unit, has said it would pause acquisitions in the near term but may look at "additional opportunities" over a longer timeframe.

Excluding items, the company reported a profit of $2.21 per share, above analysts' average estimate of $2.11 per share, boosted by strength in its PBM unit, which negotiates drug prices with manufacturers.

Sales at CVS' health services segment, which contains its PBM unit, rose 7.6% to $46.22 billion in the reported quarter compared with a year earlier.

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