NEW YORK, July 31 (Reuters) - CVS Health ( CVS ) beat

Wall Street estimates for second-quarter profit on Thursday, as

tight oversight of higher medical costs led to improved

performance for its Aetna health insurance business.

The company also flagged improved performance in its

national pharmacy chain and pharmacy benefit management

businesses.

CVS reported an adjusted quarterly profit of $1.81 per

share, above the average analyst estimate of $1.46 per share,

according to LSEG data.

For full-year 2025, the insurer raised its profit outlook to

$6.30 to $6.40 per share, compared with an average analyst

estimate of $6.12 as compiled by LSEG. It attributed the raised

forecast to its second-quarter performance.

CVS previously had expected full-year earnings per share

of $6.00 to $6.20.

CVS Health's ( CVS ) Aetna insurance business reported a medical

loss ratio, or the percentage of premiums spent on medical

services, of about 89.9% in the second quarter. Analysts

expected a ratio of 91.16%, according to LSEG estimates.

It was the third quarter in a row that CVS beat earnings

targets as the company works on a turnaround after having missed

financial targets repeatedly last year. Those problems had

stemmed from an unexpected sharp rise in medical costs in its

Medicare Advantage plans for people aged 65 and older or with

disabilities, and struggles with its pharmacies.

"Nothing is a surprise to us this quarter," said CEO David

Joyner in an interview with Reuters.

Joyner, who joined the company last October, said the Aetna

business experienced higher costs in its Medicare Advantage

plans sold through groups such as employers or retiree

organizations, but those costs were accurately anticipated.

Aetna aims to reprice half of those plans for 2026, he added.

CVS plans to close 250 brick-and-mortar pharmacies this year

in an effort to cut costs, and the company is reducing its

government-sponsored health insurance plans.

Rivals including UnitedHealth ( UNH ), Elevance and

Centene ( CNC ) have detailed higher-than-expected medical costs

for the second quarter due to a sicker patient profile and

mismatched government payment rates, primarily in Medicaid plans

for low-income people.

Government payment pressure in Medicare Advantage plans has

also squeezed insurer margins this year, with the Centers for

Medicare and Medicaid Services changing its calculations of how

to reimburse plans for their sickest members.

Joyner said CVS's primary care unit for seniors, Oak Street

Health, is impacted by these regulatory changes, but the changes

are manageable.

Revenue for CVS's health services segment, which houses

its Caremark pharmacy benefit manager, rose 10.2%, due to a more

favorable drug mix and plan renewals from existing clients, the

company said. Revenue for the retail-pharmacy and drug-infusion

business increased by 12.5% during the second quarter, which

Joyner said was aided by increases in prescription volumes

filled.