CVS Health Corp. reported fiscal fourth-quarter adjusted EPS Feb. 8 that beat analyst expectations as the company lowered guidance, citing investments it plans to make as a result of recent U.S. tax cuts.
Adjusted EPS for the three months ended Dec. 31, 2017 was $1.92, beating the consensus normalized EPS estimate of $1.88, according to S&P Capital IQ.
Adjusted net income attributable to CVS Health was $1.95 billion, in line with the consensus estimate for adjusted net income of $1.95 billion compiled by S&P Capital IQ.
That figure does not include a benefit of $1.5 billion from the Tax Cut and Jobs Act, signed into law by President Donald Trump in December 2017. Net income in the quarter was weighed down by $56 million in bridge financing costs related to CVS's acquisition of health insurer Aetna Inc.
CVS also reported results for its full 2017 fiscal year. Adjusted EPS for the year totaled $5.90, above the S&P Capital IQ consensus estimate for normalized EPS of $5.88. Adjusted net income for the year totaled $6.04 billion, down from the $6.30 billion the chain reported for 2016.
For its full fiscal 2018, CVS said the change in its outlook for adjusted consolidated operating profit will be in a range between a decrease of 1.5% and an increase of 1.5%. Previously, the company had said it expected adjusted consolidated operating profit growth to rise between 1% and 4% for the year.
CVS Executive Vice President and CFO David Denton said in a statement that the change in guidance includes the impact of investments that the retail pharmacy chain plans to make in its business after tax cuts in the U.S. Denton said CVS has up to $1.2 billion in cash benefits from tax reform that the company could use "to stimulate greater growth over the longer term."
Adjusted consolidated operating profit growth is expected to grow between 0.5% and 4.5% during the fiscal first quarter, the company said.
Net revenue during the quarter totaled $48.39 billion, higher than the $45.97 billion the company reported for the year-ago quarter. Net revenue for fiscal 2017 increased 4.1% to $184.77 billion from the $177.53 billion that the company reported for 2016.
Shares of the retail pharmacy fell 0.5% to $74 in premarket trading.
