Investing.com - CVS rallied on Wednesday as its first-quarter earnings beat expectations and healthier full-year guidance suggested that the company is in better shape than expected.
CVS Health (NYSE:CVS) raised guidance on full-year earnings to a range of $6.75 to $6.90, from its earlier forecast of $6.68 to $6.88. That sent its shares more than 6% higher.
Wall Street was bracing for a difficult quarter from CVS after the company warned in February that this year would be a transition amid rising costs and poor results from a nursing-home pharmacy unit.
But its recently acquired health insurance business boosted results and its pharmacies filled more expensive prescription drugs, helping the company deliver a beat on both the top and bottom lines. The company acquired Aetna (NYSE:AET) in a $68 billion deal that closed in November.
The company reported earnings of $1.62 on revenue of $61.65 billion, above estimates from Investing.com for earnings of $1.50 on revenue of $60.39 billion.
The upbeat results from CVS did little to prop up support for the broader healthcare sector, as sentiment has been soured by ongoing pressure from politicians, many of whom continued to push for measures to bring down drug costs. The Health Care Select Sector ETF (NYSE:XLV) was basically flat Wednesday and is up just 3.3% this year.
As the U.S. election campaign heats up in the months to come, analysts have warned that politicians will continue to bash health care companies, raising the prospect of further negative headline risk.