CVS Health Raises Earnings Outlook as Aetna Performance Improves

CVS Health has raised its adjusted earnings guidance for the year, citing improved performance in its insurance unit Aetna and stronger finances in its health benefits and pharmacy segments. The healthcare giant now expects adjusted earnings per share between $6.30 and $6.40, up from its previous outlook of $6.00 to $6.20.

Strong Q2 Results Amid Industry Challenges

In a quarter that has proven challenging for many insurers, CVS reported revenue of $98.9 billion in Q2, marking an 8% year-over-year increase. The company's net income stood at $1 billion, compared to $1.8 billion in the same quarter last year.

CVS's health benefits segment saw a significant boost, with adjusted operating income rising more than 39% year over year. Revenue in this unit increased nearly 12% to $36.3 billion, up from $32.5 billion in 2024.

Steve Nelson, president of Aetna, expressed optimism about the quarter's performance during an earnings call, stating, "We're very, very encouraged how the quarter is playing out."

Navigating Healthcare Delivery Pressures

While CVS's health benefits segment showed improvement, its health services unit faced some headwinds. This division, which includes pharmacy benefit manager Caremark and healthcare delivery assets, saw revenue increase by about 10% to $46.5 billion. However, adjusted operating income decreased by nearly 18% year over year to $1.6 billion.

Prem Shah, group president at CVS, attributed this pressure to "persistent elevated medical cost, the member mix that we had, and then the more robust benefit and supplemental benefit offerings that plans provided to their members."

The company also recorded a premium deficiency reserve of $471 million in Q2, linked to high costs in CVS's group Medicare Advantage plans. CFO Brian Newman noted that about half of these plans are set to be repriced next year, potentially alleviating some of the cost pressures.

Strategic Moves and Future Outlook

Despite the challenges, CVS remains focused on improving its performance across all segments. CEO David Joyner emphasized the company's progress in the Aetna business, stating, "We're starting to see the results of these efforts delivering better experiences while also allowing us to better navigate this elevated utilization environment."

The company's decision to exit the Affordable Care Act marketplace entirely for 2026, announced earlier this spring, reflects its strategic focus on areas with stronger growth potential. As CVS continues to adapt to the evolving healthcare landscape, its raised earnings guidance signals confidence in its ability to navigate industry challenges and drive sustainable growth.