Shares of CVS Health (NYSE:CVS) were jumping 6.2% higher as of 3:50 p.m. EST on Friday. The gain came after the healthcare company reported better-than-expected third-quarter results before the market opened.
CVS announced Q3 revenue of $67.1 billion, up 3.5% year over year. This topped the consensus Wall Street revenue estimate of $66.7 billion. The company reported adjusted earnings per share of $1.66, handily beating the average analysts' estimate of $1.33.
Although CVS Health's pharmacy services revenue slipped a little from the prior-year period, its retail/long-term care and healthcare benefits segments more than offset the decline. The company attributed its higher revenue in part to increased prescription volume, increased diagnostic testing, and membership growth for its Aetna Medicare and Medicaid plans.
Investors shouldn't focus too much on only one quarter. However, CVS Health's fortunes appear to be improving, with the company boosting its full-year 2020 revenue and earnings guidance.
The main question mark for the healthcare stock is how the ongoing COVID-19 pandemic could impact its business. So far, though, CVS Health has navigated the coronavirus crisis pretty well. The company will also soon have a new CEO at the helm. CVS announced that Larry Merlo plans to retire. Karen Lynch, who currently leads Aetna, will take over as CEO on Feb. 1, 2021.