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CVS beats profit estimates, aided by strength across

businesses

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Set to exit Obamacare individual exchange business to

streamline

operations

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Medical loss ratio improves, falling to 87.3% from 90.4%

By Manas Mishra

May 1 (Reuters) - CVS Health ( CVS ) raised its

full-year profit forecast on Thursday following strong

performance across its businesses, signalling an early recovery

after a series of troubles hit the healthcare conglomerate last

year.

CEO David Joyner, who took the helm in October, has laid out

cost-cutting plans and reshuffled top management positions to

help the company navigate one of the most challenging periods in

its six-decade history.

Its shares fell over 40% last year due to weak performance

in its insurance and pharmacy businesses and multiple cuts to

its profit outlook, but have pared most of those losses this

year following a better-than-expected earnings report in

February.

On Thursday, CVS Health's ( CVS ) adjusted quarterly profit again

beat estimates, as the company spent less on its members'

medical care than Wall Street had expected, a likely relief for

investors after UnitedHealth ( UNH ) cut its forecast last

month, citing elevated costs.

The company said it would exit the individual exchange

business, where it sells plans directly to individuals through

Obamacare exchanges -- its latest effort to streamline

operations.

CVS' pharmacy benefit management unit also plans to drop Eli

Lilly's ( LLY ) weight-loss drug Zepbound as a preferred product

from its list of drugs eligible for reimbursement, and would

retain Novo Nordisk's Wegovy.

"Zepbound will be excluded on July 1, and our clients will

save a significant amount of money in this therapy class," a CVS

spokesperson said.

CVS' medical loss ratio, or the percent of premiums spent on

patient care, fell to 87.3% from 90.4% a year ago, below

analysts' expectations of 88.9%, according to estimates compiled

by LSEG.

Health insurers have been facing increased medical costs for

the past two years, driven by high healthcare demand among older

adults enrolled in Medicare Advantage plans.

CVS earned $2.25 per share in the first quarter ended March

31, compared with analysts' average estimate of $1.70.

It raised its adjusted full-year profit forecast to $6 to

$6.20 per share from $5.75 to $6 previously.

Revenue from its pharmacy unit of $31.91 billion beat

estimates of $30.96 billion. Its health services unit brought in

revenue of $43.46 billion, also above estimates of $43.30

billion.