- - CVS raises full-year forecast, takes $5.7 billion impairment charge on health clinics

By Amina NiasseOctober 29, 2025 at 7:01 PM

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FILE PHOTO: CVS Health logo is seen in this illustration taken, February 11, 2025. REUTERS/Dado Ruvic/Illustration/File Photo

By Amina Niasse

NEW YORK (Reuters) -CVS Health raised its annual adjusted profit forecast on Wednesday, helped by improved pharmacy revenues, and also announced a $5.73 billion writedown of healthcare businesses including its in-pharmacy MinuteClinics.

The company, which operates one of the largest U.S. pharmacy chains, Aetna insurance and the CVS Caremark pharmacy benefit manager, reported a net loss of $3.13 per share for the third quarter.

Shares of CVS rose as much as 1.2% in premarket trading, reversing earlier losses as investors stayed confident about steady improvement in the underlying results as the healthcare giant recovers from a series of earnings setbacks last year.

Its insurance and PBM-related segments continue to do well, and the writedown does not impair the entire business but "certainly raises doubts... (about) CVS' desire to compete in patient care delivery," said Kevin Gade, COO at Bahl & Gaynor, which holds some CVS shares.

The $5.73 billion writedown reflects a restructuring of Oak Street Health, a primary care provider, and diminished value of Signify Health that offers home-based services, both of which focus on government-backed Medicare program for older adults and people with disabilities.

Like others in the industry, including those run by UnitedHealth Group, these Medicare businesses have been pressured by higher medical services spending and changes in government reimbursement.

The company raised its forecast for adjusted full-year earnings growth, which CEO David Joyner said reflected new customers acquired from its purchase of the now-shuttered chain drugstore Rite Aid, and in its Caremark pharmacy benefit business.

Joyner said in an interview with Reuters that the company was conservatively managing its risks around its health insurance and healthcare delivery units.

"We are taking a cautious and prudent look in terms of where healthcare trends have been and where we expect them to continue to be elevated as we head into 2026," he said.

Separately, CVS took an $83 million charge to cover the closure of 16 Oak Street clinics and said it planned to "reduce the number of new primary care clinics it would open in 2026 and thereafter".

"Our thesis for that business (was) that we were going to grow, and then we were going to be driving the patient growth inside the business," Joyner said. "The markets changed."

The earnings performance makes it the fourth consecutive quarter of CVS beating earnings estimates, solidifying a turnaround it promised last year after repeatedly falling short of expectations weighed by medical costs in its insurance business.

CVS reported an adjusted quarterly profit of $1.60 per share, above analysts' average estimate of $1.37 per share, according to data compiled by LSEG.

For full-year 2025, the healthcare conglomerate raised its adjusted profit outlook to between $6.55 and $6.65 per share, from $6.30 to $6.40 per share forecast previously.

Analysts were expecting annual adjusted profit of $6.38 per share.

CVS Health's Aetna insurance business reported a medical loss ratio - or the percentage of premiums spent on medical services - of 92.8%, on par with analysts' estimate of 92.83%.

The company reported a medical loss ratio of 89.9% in the last quarter.

CVS finalized a deal this year to buy Rite Aid's pharmacies and acquired 9 million customers, a May regulatory filing showed. The company was able to fill more prescriptions and dispense more expensive drugs, driving revenue 11.7% higher to $36.2 billion for that category.

Total revenue for the quarter rose 7.8% to $102.9 billion, beating an expectation of $98.85 billion.

(Reporting by Amina Niasse in New York and Mariam Sunny in Bengaluru; Editing by Pooja Desai)

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