It was learned from China Fortune Financial that on Wednesday, USA chain pharmacy operator CVS Health (CVS.US) announced its 2024 third-quarter financial report, achieving better-than-expected quarterly revenue for the first time this year. After experiencing two consecutive quarters of revenue decline in 2024, CVS Health's Q3 revenue increased by 6.3% year-on-year to $95.4 billion, exceeding market expectations by $2.7 billion, as its pharmaceutical and consumer health, as well as the medical care benefits department, performed well. CVS Health's pharmacy and consumer health department revenue was $32.4 billion, a year-on-year increase of about 12%.

Adjusted earnings per share were $1.09, below expectations. The company stated that this included expenses for expected losses in the fourth quarter for medical insurance and individual health exchange plans, resulting in a decrease of 63 cents per share. The company's adjusted net income decreased by about 52% year-on-year to $1.4 billion, mainly due to insufficient reserves of about $1.1 billion and restructuring costs of $1.2 billion.

At the same time, Aetna's Health Care Benefits department, operated by Aetna, generated revenue of $33 billion, an increase of about 26% year-on-year, despite the department's premiums insufficient reserve of about $1.1 billion, resulting in an operational loss of $0.924 billion, compared to the department's profit of $1.5 billion last year.

Aetna has been struggling as its Medicare Advantage business received lower quality ratings from the government. This lowered its reimbursement levels, even as it faced rising medical costs. Although the government's quality ratings subsequently improved, these indicators will take some time to result in increased spending. The healthcare benefits department's medical loss ratio (indicating the share of premiums paid for healthcare benefits) rose from 85.7% in the same period last year to 95.2%, due to increased sensitivity and utilization rates among the company's medical subsidy plan members.

The revenue of the health services department where Caremark, a PBM subsidiary of CVS Health, is located, decreased by 5% year-on-year to $44.1 billion, primarily due to the loss of a major customer announced earlier.

The healthcare giant appointed Steve Nelson as the President of its insurance subsidiary Aetna, effective from Wednesday. Nelson most recently served as the CEO of value-based primary healthcare company ChenMed. Nelson had previously served as the CEO of the insurance company UnitedHealthcare under the UnitedHealth Group (UNH.US). He will have to address issues such as rising medical costs and reduced government spending, which have impacted the department's returns and triggered the anger of activist investor Glenview Capital Management.

CVS Health CEO David Joyner stated that he is "an industry veteran who has successfully led multiple departments of a diversified managed medical company in his career, driving innovation and growth."

Due to the rising medical costs in the medical care department, the new CEO Joey Na did not provide investors with financial performance guidance for the company in 2024 or 2025 in his first financial report since taking office.

In a statement, Joey Na stated that CVS Health needs to "work throughout the entire enterprise to address macro challenges in the insurance business." These challenges led to three profit forecast reductions for CVS Health this year, until Joey Na took over from former CEO Karen Lynch last month and canceled the guidance.

The company's pharmacy benefits manager is facing government scrutiny, Anthem has been working hard to control costs, and hundreds of retail stores have been closed. Glenview Capital has been driving change, including restructuring the board of directors, but has not disclosed specific details.

Joey Na has also started building his own management team, promoting Prem Shah to Group President, responsible for the company's pharmaceutical benefits management services, pharmacies, and medical care services.

In pre-market trading on Wednesday, as at the time of writing, CVS Health's stock price rose by 10.21%. As of Tuesday's close, the company has fallen 30% year-to-date, while the S&P 500 index has risen 21% during the same period.