What happened

Shares of CVS (CVS 1.73%) were slipping in February after the drugstore chain signaled that its performance in 2019 would be challenged as it absorbed its nearly $70 billion acquisition of Aetna, the health insurance giant. That news weighed on fourth-quarter results, and the stock finished the month down 12%, according to data from S&P Global Market Intelligence.

As the chart below shows, the stock's slide came primarily following its disappointing fourth-quarter earnings report on Feb. 20.

CVS Chart

CVS data by YCharts.

So what

In the fourth quarter, the company completed its acquisition of Aetna and reported a 12.5% increase in revenue to $54.42 billion, which was slightly below estimates at $54.58 billion.

A pharmacist helps an older male customer.

Image source: Getty Images.

The pharmacy chain also took a $2.2 billion goodwill impairment charge on its long-term-care business, noting that business has "continued to experience challenges that have impacted our ability to grow the business at the rate that was originally estimated when the Company acquired Omnicare in 2015."

Adjusting for that charge, the company turned in a per-share profit of $2.14 in the period, which topped expectations at $2.05. However, guidance for 2019 as well as headwinds in distinct businesses like long-term care overshadowed the earnings beat.

On the coming year, CEO Larry Merlo said: "2019 will be a year of transition as we integrate Aetna and focus on key pillars of our growth strategy. We are fully aware of the need to address the impact of certain headwinds that are having a disproportionate impact in 2019 compared to prior years, and importantly, we are taking comprehensive actions to move past them."

Check out the latest earnings call transcript for CVS.

Now what

In 2019, management sees adjusted EPS of $6.68 to $6.88, down from $7.08 in 2018 and worse than analyst estimates at the time at $7.41. The lower profit forecast underscores the challenges in businesses like long-term care and with the integration of Aetna. However, the company was confident about returning to growth in 2020.

CVS shares continued to slide through the first days of March as rival Walgreen Boots Alliance (WBA -0.58%) warned on reimburse rates and hinted it may not meet its full-year earnings forecast, a sign of the challenges in the overall pharmacy industry. Through Wednesday morning, CVS stock is down another 5% in March.