CVS Health (CVS -0.02%) benefited from the COVID-19 pandemic in several ways during the first quarter. However, there were questions about whether the coronavirus outbreak would provide only a temporary boost for the company. Those questions have now been answered.

The healthcare giant announced its second-quarter results before the market opened on Wednesday. Here are the highlights from CVS Health's Q2 update.

A pharmacist speaks to a customer at pharmacy counter.

Image source: Getty Images.

By the numbers

CVS Health reported revenue in the second quarter of $65.3 billion, up 3% year over year. This result topped the consensus Wall Street Q2 revenue estimate of $64.23 billion.

The company announced Q2 net income of nearly $3 billion, or $2.26 per share, based on generally accepted accounting principles (GAAP). This represented a big increase from its GAAP earnings of $1.9 billion, or $1.49 per share, reported in the same quarter of 2019. 

CVS recorded adjusted net income of $2.64 per share. This was well above adjusted earnings of $1.89 per share posted in the prior-year period and blew past the average analysts' adjusted earnings estimate of $1.93 per share.

Behind the numbers

Two of CVS Health's business segments faced headwinds related to the COVID-19 pandemic in the second quarter. However, both segments still delivered higher sales than in the prior-year period.

Pharmacy services revenue increased by $47 million -- well under 1% year over year -- to $34.9 billion in the second quarter. Growth was held back by the coronavirus outbreak, as well as client losses previously disclosed by CVS Health and a sustained trend of price compression.

CVS' retail/LTC segment, which includes its retail pharmacy stores and the Omnicare long-term care (LTC) business, generated revenue of $21.7 billion in Q2, up 1% year over year. The COVID-19 pandemic caused front-store sales to fall 4.6%. However, the segment benefited from higher retail pharmacy prescription volume and higher brand-drug prices.

Revenue for the company's healthcare benefits segment, which includes Aetna, jumped 6.1% year over year in Q2 to $18.5 billion. This growth was primarily due to increased membership in the segment's government products plus a positive impact from the reinstatement of the Affordable Care Act Health Insurance Fee (HIF) in 2020.

CVS Health's bottom-line improvement stemmed largely from the impact of the COVID-19 pandemic. Individuals pushed back elective procedures, resulting in much lower medical costs for the company's healthcare benefits segment.

Looking ahead

The company boosted its full-year 2020 guidance after its solid Q2 performance. CVS Health now projects GAAP earnings per share (EPS) will be between $5.59 and $5.72, up from its previous forecast of a range of $5.47 to $5.60. Non-GAAP EPS is expected to be between $7.14 and $7.27, up from previous guidance of $7.04 to $7.17.

There's no question that the biggest variable for the healthcare stock throughout the rest of 2020 and into 2021 is the COVID-19 pandemic. CVS Health's revenue growth should increase as the coronavirus outbreak wanes, but its earnings growth could slow as medical costs increase with patients undergoing elective surgeries that they've delayed.