Why did CVS's net profit drop sharply in Q1 2024?

CVS's net profit dropped sharply in Q1 2024 due to several key factors: 1. **Impact of Medicaid Customer Contract Change**: This had a significant effect on CVS's financial performance, leading to a decline in net income. The company encountered a change in a Medicaid customer contract during the second quarter of 2023, which continued to impact its financial results in Q1 2024. 2. **Decline in COVID-19 Vaccinations**: As the pandemic waned, the demand for COVID-19 vaccinations decreased, which adversely affected CVS's revenue. The company's revenues from COVID-19 vaccinations dropped significantly, contributing to the decline in net income. 3. **Higher Medical Costs**: CVS faced rising medical expenses, particularly in its health insurance unit, which is expected to hurt its financial performance in 2024. The company had to slash its 2024 guidance for profit and cash flow from operations due to the rising medical costs. In summary, CVS's net profit drop in Q1 2024 was primarily due to the impact of a Medicaid customer contract change, the decline in COVID-19 vaccinations, and higher medical costs. These factors combined to negatively affect the company's financial performance during the quarter. |code|Ticker|Name|Date|Total Revenue|Net Income|market_code| |---|---|---|---|---|---|---| |CVS|CVS.N|CVS Health|2023 Q2|8.8921E10|1.914E9|169| |CVS|CVS.N|CVS Health|2023 Q3|8.9764E10|2.265E9|169| |CVS|CVS.N|CVS Health|2023 Q4|9.3813E10|2.047E9|169| |CVS|CVS.N|CVS Health|2024 Q1|8.8437E10|1.124E9|169|