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CVS Health Q1 Earnings Surge 60% on Medicare Advantage Boost

Word on the StreetThursday, May 1, 2025 10:04 am ET

1min read

CVS Health, a leading healthcare company, reported better-than-expected first-quarter earnings, driven by improvements in medical insurance benefits. The company has raised its 2025 performance expectations, surpassing Wall Street's forecasts. This achievement is attributed to higher star ratings for its "Medicare Advantage plans," a privately operated version of the federal government's Medicare program, which has boosted the company's performance.

CVS Health and other health insurance providers have been struggling with rising costs from Medicare Advantage plan customers in recent quarters. Just a few weeks before cvs health released its report, its competitor unitedhealth group lowered its 2025 performance expectations due to increased medical service usage.

Overall, CVS Health's first-quarter adjusted earnings per share were $2.25, with profits surging 60% to $17.8 billion. Total revenue grew 7% to $94.59 billion. Analysts had previously estimated the company's first-quarter earnings per share at $1.70 and revenue at $93.66 billion.

For the full year, CVS Health now expects adjusted earnings per share to be between $6.00 and $6.20. In February, the company had forecast adjusted earnings per share of $5.75 to $6.00. Analysts had expected $5.92.

Headquartered in Woonsocket, Rhode Island, CVS Health operates one of the largest pharmacy chains in the United States and a major pharmacy benefit management business, providing prescription drug insurance services to employers, insurance companies, and other large clients. Through its Aetna division, the company also provides insurance services to 27 million people.

The company also announced that it will exit the individual insurance market under the Affordable Care Act next year. Currently, it serves approximately 1 million people in 17 states in this market.

CVS Health's stock price rose 10% to $73.55 in pre-market trading. Following a significant decline of over 40% last year, CVS Health's stock has risen more than 48% so far in 2025. The company's challenging 2024 included multiple downward revisions of performance expectations and the resignation of its former CEO, Karen Lynch.

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