CVS Health announced Q1 financial results that exceeded market predictions which led to a 7% increase in premarket stock value. The company delivered $2.25 in adjusted earnings per share which surpassed the $1.70 forecast from LSEG while generating $94.59 billion in revenue that exceeded the predicted $93.64 billion. The company increased its 2025 adjusted earnings outlook to $6-6.20 per share while lowering its GAAP EPS forecast because of a $431 million legal ruling at Omnicare which CVS plans to challenge.
The insurance unit achieved better results because of strategic market concentration which led to a medical benefit ratio reduction from 90.4% to 87.3% according to CEO David Joyner. Joyner stated that U.S.-sourced retail products would help protect against the pharmaceutical tariffs that Trump plans to implement. The retail pharmacy sales numbers fell short of StreetAccount predictions because customers spent less money and received reduced drug reimbursement benefits.
The $2 billion cost reduction plan and executive changes under Joyner who took over from Karen Lynch in October have started to produce positive outcomes for the company. The company’s decision to exit Affordable Care Act marketplaces in 2026 demonstrates its strategic direction as Joyner emphasizes the company’s ability to adapt to medical cost pressures and tariff uncertainties.
