CVS Health (NYSE:CVS) appears to be on a roll. Its shares have soared more than 30% year to date. And CVS reported strong third-quarter results before the market opened on Wednesday.

Investors definitely liked the company's results, with the healthcare stock jumping more than 3% in intraday trading. Here are five key highlights from CVS Health's Q3 earnings update.

CVS Pharmacy store.

Image source: CVS Health.

1. Better-than-expected revenue and earnings

The most important thing to know about CVS Health's third-quarter results is that they were better than expected from top to bottom. The company announced Q3 revenue of $73.8 billion. This result reflected a 10% year-over-year increase and was well above the Wall Street consensus estimate of $70.5 billion.

CVS Health reported diluted earnings per share (EPS) of $1.20, based on generally accepted accounting principles (GAAP), up 29% year over year. It posted adjusted EPS of $1.97, an increase of 18.7% over the prior-year period and higher than the average analyst estimate of $1.78. 

2. COVID-19 headwinds and tailwinds

Once again, COVID-19 ranked as the biggest story in CVS Health's quarterly update. If nothing else, the company's year-over-year comparisons were helped by the impact of the pandemic in the third quarter of 2020. However, there were also both headwinds and tailwinds from COVID-19 in the recent quarter.

CVS Health's Aetna health-insurance business experienced higher costs in Q3 related to COVID-19. These increased costs were a key driver behind the unit's medical-benefits ratio -- the ratio of premiums spent on medical care and services -- from 84% in the prior-year period to 85.8% in the third quarter of 2021.

On the other hand, CVS administered 8.5 million COVID-19 diagnostic tests in Q3. It also gave 11.6 million COVID-19 vaccines. These tests and vaccinations helped significantly boost pharmacy claims processed.

3. Increased full-year guidance

CVS Health's strong Q3 results led it to raise its guidance for full-year 2021. The company now expects GAAP diluted EPS between $6.35 and $6.45, compared to its previous forecast of GAAP EPS between $6.13 and $6.23. The revised full-year outlook is for adjusted EPS to come in between $7.90 and $8, up from the previous range of $7.70 to $7.80.

The healthcare giant also projects cash flow from operations for full-year 2021 will be between $13 billion and $13.5 billion. This range is up from the previous guidance of $12.5 billion to $13 billion.

4. Improving financial condition

It's sometimes easy to overlook positive financial results beyond revenue and earnings. However, CVS Health continued to improve its overall financial condition in the third quarter.

The company repaid $1.1 billion of long-term debt in Q3. So far this year, CVS has paid down $6.5 billion in debt. And since the close of the Aetna acquisition in 2018, it has repaid a net total of $18.7 billion of long-term debt.

Importantly, CVS Health achieved this debt reduction while still paying $659 million in dividends in the third quarter. It appears to be in a good position to retain its investment-grade ratings and continue deleveraging in the future.

5. Expanding geographically and virtually

Quarterly updates often provide some hints about a company's longer-term growth prospects. That was the case with CVS Health's Q3 report. The healthcare leader is set to expand both geographically and virtually.

CVS said that it's entering individual health-insurance exchange markets in eight new states in 2022: Arizona, Florida, Georgia, Missouri, Nevada, North Carolina, Texas, and Virginia. The company stated that it will offer its first Aetna-CVS Health co-branded offerings in seven of those states.

In the third quarter, CVS launched its Aetna Virtual Primary Care solution. Individuals can access primary care anytime and anywhere. The underlying platform for the solution is powered by Teladoc Health's Primary360. Virtual primary care seems likely to be a growth driver for both CVS and Teladoc.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.