Woonsocket, R.I.-based CVS Health saw operating income decrease in the third quarter of fiscal year 2017 as its retail business faced reimbursement pressure and rising expenses related to recent hurricanes.
CVS Health's operating income declined $325 million, or 11.5 percent, to $2.5 billion in the three months ended Sept. 30, compared to the same period a year prior. The company attributed the decrease to restricted provider networks excluding CVS Pharmacy and to reimbursement pressure in its retail segment. In addition, CVS Health incurred $55 million in expenses in the third quarter of this year in its retail segment due to three major hurricanes that struck the Southern United States and Puerto Rico in August and September.
While CVS Health recorded a 3.5 percent year-over-year increase in revenue to $46.2 billion in the third quarter of this year, net income fell. The company reported net income of $1.3 billion in the third quarter of 2017, a 16.6 percent decrease from the same period last year, due to decreased operating performance.
CVS Health President and CEO Larry Merlo said, "The solid third quarter results we posted today keep us well on track to achieve our full-year targets. While operating profit in the Retail/LTC Segment was impacted by the devastating hurricanes, operating profit in the Pharmacy Services Segment was in line with expectations."
CVS Health is said to be in talks to purchase Aetna for more than $66 billion.
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