Time: 2024-08-10
CVS Health Corporation recently revealed plans to reduce costs by billion through a multi - year productivity initiative as a response to the continuous rise in medical expenses . The company also adjusted its 2024 earnings outlook , with expected earnings per share falling in the range of .40 to .65 , down from its initial forecast of at least per share . This adjustment was attributed to ongoing pressure within the Health Care Benefits segment . To achieve these cost - cutting goals , CVS will leverage artificial intelligence and automation , consolidate platforms , and optimize its operations.
CEO Karen Lynch emphasized the company 's commitment to delivering value to customers and taking necessary actions to capitalize on opportunities . Lynch will now directly oversee the health care benefits segment following the departure of Aetna insurance unit head , Brian Kane . The health care industry , particularly the insurance sector , is facing challenges as profits decline due to the disenrollment of Medicaid beneficiaries . CVS 's closure of several stores and staff layoffs aim to align with evolving customer needs . By the end of 2024 , the company plans to shut down a total of 900 stores across its retail locations.
CVS Health revised its full - year profit outlook downward and introduced a new strategy to reduce expenses amid escalating medical costs impacting the insurance industry . The company 's adjusted earnings for 2024 are expected to be .40 to .65 per share , lower than analysts ' projections of .97 per share . CVS also lowered its unadjusted earnings forecast to .95 to .20 per share . The health insurance segment is particularly affected by increased medical costs and Medicare Advantage star ratings , influencing the company 's financial performance.
In the second quarter , CVS reported adjusted earnings per share of .83 , surpassing analysts ' expectations of .73 . Despite a slight decrease in net income compared to the previous year , the company 's revenue grew by 2.6 % to 1.23 billion , driven by the pharmacy business and insurance unit . As medical costs continue to rise , CVS faces challenges in managing its Medicare business and addressing premium deficiencies . The impact of these factors on earnings between the third and fourth quarters remains uncertain , posing additional hurdles for the company 's financial outlook.
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