By Anna Wilde Mathews

CVS Health reported adjusted earnings that beat Wall Street's expectations and raised its guidance for the rest of the year, boosted by improved performance at its Aetna insurance unit.

But the healthcare giant swung to a net loss, hit by a $5.7 billion write-down largely related to its senior clinics business, which CVS bought in 2023 for about $10.6 billion. CVS said it would close 16 of the Oak Street locations, leaving 230, and wouldn't open any new ones next year.

CVS Chief Executive David Joyner said in an interview that the Oak Street business needs to retrench, after coming under pressure from higher medical costs and regulatory changes in the Medicare business. "We needed to take a breather, take a step back, and focus on how to run and operate these clinics," he said. "The marketplace has changed."

CVS, the parent of a big pharmacy-benefit manager as well as its eponymous drugstores and Aetna, raised its projected adjusted earnings for 2025 to a range of $6.55 to $6.65 a share, from $6.30 to $6.40 a share.

For the third quarter, CVS reported adjusted earnings a share of $1.60, compared with $1.09 a year earlier. The FactSet analyst consensus estimate was $1.37.

The net loss in the third quarter was $3.98 billion, or $3.13 a share, compared with net profit of $87 million, or 7 cents a share, a year ago. Revenue totaled $102.87 billion, an increase from $95.43 billion in the prior year.

The Aetna medical-loss ratio, or the share of premiums spent on healthcare costs, was 92.8%, higher than the 92.4% expected by FactSet analysts.

Like other insurers, Aetna has faced higher medical costs, particularly in its Medicare business. The unit's adjusted operating income of $314 million in the third quarter was a turnaround from the $924 million loss a year earlier, which included the cost of setting up a premium deficiency reserve.

"The Aetna recovery is in full swing," Joyner said.

The insurer is projecting that its Medicare plan enrollment will be flat or slightly down in 2026, he said.

Write to Anna Wilde Mathews at anna.mathews@wsj.com

(END) Dow Jones Newswires

October 29, 2025 06:33 ET (10:33 GMT)

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