CVS Buys Aetna as Amazon Healthcare Battle Heats Up

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    To Big to Fail was a problem in the financial sector, what could possibly go wrong by doing it in the healthcare sector?


    Do you think that is their game here or just trying to protect a customer base? I hear what you are saying at the same time though.


    all I know is, when companies get TBTF they get more power in Washington and the consumer some how loses


    Now the tax bill has passed –

    William O’Neil data shows CVS Health $CVS has a 38.9% effective tax rate, tops among consumer staples companies. Aetna $AET is another high-tax company. CEO Larry Merlo said recently $CVS would take some of its tax windfall and reinvest it in reconfiguring its stores to provide more health services.

    “Companies with businesses that are primarily domestic-focused tend to have higher tax rates on average. Similarly, small-cap stocks, which are generally more U.S.-centric, could see strong earnings revisions,” wrote William O’Neil chief investment strategist Randy Watts and senior equity analyst Romeo Alvarez.

    Source: IBD


    CVS earnings and revenue beat expectations

    CVS Health Corp. CVS Thursday premarket reported fourth-quarter earnings and revenue that beat guidance. Net income totaled $3.29 million, or $3.22 per share, up from $1.71 million, or $1.59 per share for the same period last year. Adjusted EPS was $1.92. Revenue for the quarter totaled $48.4 billion, up from $46.0 billion year-over-year. The FactSet consensus was for EPS of $1.89 and sales of $47.54 billion.

    Revenue in pharmacy services was up 9.3% to about $34.2 billion, driven largely by growth in the pharmacy network and specialty pharmacy volume.

    Retail revenue rose 0.3% to about $20.9 billion driven by a same-store prescription increase of 2.5%.

    Same-store sales rose 0.1% and pharmacy same-store sales were up 0.4%. Front store same-store sales fell 0.7%.

    CVS expects at least $275 million of tax overhaul benefit which will be used for “strategic investments” and reducing adjusted profit growth by 250 basis points. CVS shares are up 7.8% for the last three months, but down 3.5% for the past year.

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