CVS Health Corp (NYSE:CVS) beat third-quarter earnings estimates, raised its 2026 financial forecasts and announced plans to split into two independent, publicly traded companies.
Adjusted earnings reached $2.09 a share, exceeding Wall Street’s $1.65 consensus estimate and rising from $1.60 a year earlier.
Revenue also beat expectations, increasing 5.4% to $108.4 billion for the quarter ended Sept. 30, against analysts’ forecast of $104.75 billion.
CVS raised its full-year adjusted earnings forecast to at least $8.20 a share from $7.90 to $8.10.
Its forecast under generally accepted accounting principles is now at least $6.98 a share, compared with the previous range of $6.84 to $7.04.
The operating cash flow forecast increased to at least $15.5 billion from at least $11.5 billion, after CVS generated $15.3 billion through September.
CVS attributed the higher outlook to improvements in its insurance and pharmacy businesses, while remaining cautious about rising costs and potential economic headwinds.
Insurance adjusted operating income climbed to $912 million from $314 million a year earlier, primarily reflecting stronger performance in its government business.
Medical costs fell to 91.3% of premium revenue from 92.8%, while favorable revisions to prior years’ health care costs payable estimates totaled $1.3 billion during the first nine months.
Alongside the earnings announcement, CVS outlined a separation that would mark a shift from its longstanding strategy of combining insurance, pharmacy benefit management and health care services within one organization.
One company would retain the CVS Health name and include Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health.
The other, CVS Pharmacy, would include approximately 9,000 retail pharmacy locations, along with MinuteClinic locations and other services.
Management expects the split to give each business greater independence while allowing both to pursue partnerships across the health care industry.
The separation is expected to be completed in the first half of 2028.
CVS shares were down 11% at $81.44 in Wednesday morning trading.