=CVS Health (CVS) reported earnings on Tue 8 Nov 2016 (b/o)

CVS Health beats by $0.07, misses on revs; issues downside guidance due to pharmacy marketplace changes, approved a new share repurchase program  :

• Reports Q3 (Sep) earnings of $1.64 per share, $0.07 better than the Capital IQ Consensus of $1.57; revenues rose 15.5% year/year to $44.62 bln vs the $45.29 bln Capital IQ Consensus. 
• Co issues downside guidance for Q4, sees EPS of $1.64-1.70 vs. $1.79 Capital IQ Consensus Estimate.
• Co issues downside guidance for FY16, sees EPS of $5.75-5.83 vs. $5.85 Capital IQ Consensus Estimate. The Company raised cash flow guidance for 2016 and now expects to deliver cash flow from operations of $9.3 billion to $9.5 billion and 2016 free cash flow of $6.8 billion to $7.0 billion.
• Co issues downside guidance for FY17, sees EPS of $5.77-5.93 vs. $6.53 Capital IQ Consensus Estimate. 
  • Included in this outlook is the impact from the projected loss of more than 40 million retail prescriptions related to marketplace changes, including new retail pharmacy networks that are excluding CVS Pharmacy drugstores.
• Co's board of directors approved a new share repurchase program for up to $15 billion of the Company's outstanding common stock. Combined with the approximately $3.7 billion that remains from the 2014 program, the Company has approximately $18.7 billion available for share repurchases.
• "We posted a solid third quarter with the PBM exceeding our expectations and retail performing at the lower end of our expectations. However, very recent pharmacy network changes in the marketplace are expected to cause some retail prescriptions to begin migrating out of our pharmacies this quarter. In addition, we are currently experiencing slowing prescription growth in the overall market as well as a soft seasonal business. These factors combined are leading us to reduce the mid-point of our guidance for this year by five cents per share. The network changes have more significant implications for our 2017 outlook. While we expect a healthy increase in PBM operating profit growth in 2017, we expect a decrease in retail operating profit growth."