(Reuters) -Drugstore operator CVS Health Corp (NYSE:CVS) said on Thursday it expects revenue from COVID-19 vaccination and testing to decline significantly next year, after it forecast 2022 adjusted earnings largely below estimates.
Shares of CVS, however, were up 3.8% at $96.7 after it raised its 2021 profit forecast to $8.00 per share from prior estimate of $7.90 to $8.00, with the company seeing higher-than-expected COVID-19 vaccine and testing sale volumes in the fourth quarter.
Pharmacy chains like CVS have benefited from distribution of COVID-19 vaccines and tests during the pandemic. CVS has so far administered 50 million vaccines and 29 million tests, which is expected to generate over $3 billion revenue in 2021.
CVS said it now assumes COVID-19 related revenue will decline 60%-70% next year, but added there were moving parts to the outlook given the uncertainty regarding new variants, booster doses and availability of oral antiviral medications and their impact on testing demand.
"You can make a bull case on vaccine and testing for next year based on what is happening and especially if we go into the mode of an annual booster kind of thing," Chief Financial Officer Shawn Guertin said at the company's Investor Day.
The company said it will revise this estimate once it has more data and clarity on policy.
The drugstore chain, which has seen its profit weighed down this year by higher medical costs in health insurer Aetna (NYSE:AET) due to the pandemic, expects COVID-19 to have a smaller impact on its insurance business next year.
CVS is still presuming COVID-19 will have a net negative impact next year, specifically in the Health Care Benefits segment, but will be significantly lesser than 2021, according to Guertin.
The company expects 2022 full-year adjusted profit between $8.10 and $8.30 per share, the midpoint of which was below analysts' estimates of $8.24.