(Reuters) – CVS Health Corp (N:) raised its full-year profit forecast and beat Wall Street expectations for quarterly profit on Wednesday as a drop in non-urgent medical procedures led to fewer claims at its health insurance business.
Shares of the company rose nearly 5% premarket after it raised its full-year profit forecast to between $7.14 per share and $7.27 per share from $7.04 per share to $7.17 per share.
Other health insurers including UnitedHealth Group (N:) and Anthem Inc (N:) have reported a surge in second-quarter profit as fewer patients opted for non-urgent surgeries and procedures due to the pandemic, helping control medical costs.
The medical benefit ratio – the percentage of premiums paid out for medical services – at CVS’ health insurance unit fell to 70.3% from 84% a year earlier.
The health insurance unit’s sales rose 6.1% to $18.47 billion.
Net income attributable to CVS rose to $2.98 billion, or $2.26 per share, in the second-quarter ended June 30, from $1.94 billion, or $1.49 per share, a year earlier.
Excluding items, the company earned $2.64 per share, beating estimates of $1.93, according to IBES data from Refinitiv.
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