CVS Health Reports Strong Q3 Earnings Despite Net Loss

CVS Health reported robust third-quarter earnings for 2025, exceeding analysts’ expectations while simultaneously raising its adjusted profit outlook. Despite the positive earnings, the company experienced a net loss of $3.99 billion, primarily due to a substantial $5.7 billion goodwill impairment charge linked to its health care services segment. This financial performance was revealed on July 9, 2025, during a significant moment for the company as it marks David Joyner‘s first full year as CEO.

Under Joyner’s leadership, CVS has initiated a series of aggressive reforms aimed at revitalizing the struggling drugstore chain. These measures include executive reshuffling and cost-cutting strategies, contributing to an impressive 85% increase in share value over the year. Despite the quarterly loss, CVS increased its fiscal 2025 adjusted earnings forecast to between $6.55 and $6.65 per share, up from the previous estimate of $6.30 to $6.40.

Joyner expressed his satisfaction with the company’s trajectory, stating, “I couldn’t be more happy about the fact that this is three quarters where we’ve had a beat and raise.” He pointed to several factors contributing to this success, including a recovery in Aetna, its insurance subsidiary, which has been navigating increased medical costs as more Medicare Advantage patients return for delayed procedures.

CVS reported third-quarter earnings per share of $1.60, significantly higher than the $1.37 analysts had anticipated. The company’s revenue reached $102.87 billion, surpassing expectations of $98.85 billion. The net loss for the quarter is a stark contrast to the net income of $71 million, or $0.07 per share, recorded during the same period last year.

In a detailed statement, CVS attributed the loss to the goodwill impairment charge, which reflects ongoing challenges in the health care delivery reporting unit. The company has implemented management changes within this segment and is reevaluating its strategy, including plans to slow down the opening of new primary care clinics in 2026 and beyond. Joyner confirmed that CVS would be closing 16 locations of primary care provider Oak Street Health, although he emphasized that this decision does not reflect a diminished commitment to value-based care.

Excluding specific items such as amortization of intangible assets and restructuring charges, adjusted earnings stood at $1.60 per share for the quarter. CVS’s total sales, which increased by 7.8% compared to the same quarter last year, demonstrated growth across all three of its business segments.

The insurance segment showed notable improvements, with a medical benefit ratio—indicating total medical expenses relative to premiums—decreasing to 92.8% from 95.2% a year earlier. A lower ratio generally signifies higher profitability as it indicates that premiums collected exceeded benefits paid out. This ratio was slightly above the 92.4% that analysts had anticipated.

For the third quarter, the insurance business generated $35.99 billion in revenue, marking over a 9% increase from the previous year, outpacing the $34.48 billion forecasted by analysts. The growth was primarily attributed to the government business, bolstered by provisions from the Inflation Reduction Act impacting Medicare Part D premiums.

In the pharmacy and consumer wellness division, CVS recorded $36.21 billion in sales, an 11.7% year-on-year rise, aided by increased prescription volumes, including acquisitions from Rite Aid. This unit outperformed estimates of $35.6 billion for the quarter.

Meanwhile, CVS’s health services segment brought in $49.27 billion for the quarter, reflecting an 11.6% increase compared to the same quarter in 2024. Again, this exceeded analysts’ expectations of $45.71 billion.

As CVS Health continues to navigate through its restructuring efforts and address challenges within its health care delivery segment, it remains focused on capitalizing on growth opportunities across its business units. The company’s ongoing adjustments and positive outlook suggest a commitment to enhancing its financial performance and operational efficiency in the coming quarters.