August 8, 2018

CVS’ 2Q net turns red on Ohio acquisition

Photo | CNN Money
Photo | CNN Money

CVS Health, which plans to acquire Hartford health insurer Aetna for about $69 billion, said it posted red ink in the second quarter due to a $3.9 billion charge to acquire an Ohio-based pharmaceutical distributor.

For the quarter ended June 30, CVS recorded a net loss of $2.6 billion, or $2.5 a diluted share, compared to a $1.1 billion profit, or $1 a diluted share, in the year-ago period.

Although revenue rose 2.2 percent to $46.7 billion, the pharmacy giant incurred a $3.9 billion charge during the quarter to purchase Omnicare, which specializes in care at nursing homes and senior-living communities, among other long-term care centers. CVS agreed to buy Omnicare for $10 billion in 2015.

For the first half this year, CVS has netted a $1.6 billion loss vs. a $2 billion profit in the first half last year.

The proposed CVS-Aetna merger is expect to close in the second half of 2018 despite opposition from the American Medical Association (AMA), the nation's largest physician organization.

CVS has promised several Aetna officials key positions under the combined companies. That includes Aetna President Karen S. Lynch, who will become the insurer's top executive when the proposed deal is completed.

CVS has said it will retain Aetna's presence in downtown Hartford.

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