CVS Health (NYSE: CVS) reported Q1 EPS of $1.14, $0.06 better than the analyst estimate of $1.08. Revenue for the quarter came in at $36.3 billion versus the consensus estimate of $35.93 billion.

Revenues in the Pharmacy Services Segment increased 18.2%, or $3.7 billion, to $23.9 billion in the three months ended March 31, 2015. The increase was primarily driven by growth in specialty pharmacy and pharmacy network claims. Pharmacy network claims processed during the three months ended March 31, 2015, increased 11.0% to 230.8 million compared to 208.0 million in the prior year. The increase in the pharmacy network claim volume was primarily due to net new business as well as growth in Managed Medicaid and public exchanges. Mail choice claims processed during the three months ended March 31, 2015, increased 2.7% to 20.3 million, compared to 19.8 million in the prior year. The increase in mail choice claims was driven by specialty claim volume and increased claims associated with the continued adoption of our Maintenance Choice® offerings.

Revenues in the Retail Pharmacy Segment increased 2.9%, or $471 million, to $17.0 billion in the three months ended March 31, 2015. Same store sales increased 1.2% over the first quarter of last year, with pharmacy same store sales up 4.2% and front store same store sales down 6.1%. On a comparable basis, front store same store sales would have been approximately 800 basis points higher if tobacco and the estimated associated basket sales were excluded from the three months ended March 31, 2014. Front stores same store sales were impacted by softer customer traffic, partially offset by an increase in basket size. Pharmacy same store prescription volumes rose 5.1% on a 30-day equivalent basis, partially driven by strong seasonal volume. Pharmacy same store sales were negatively impacted by approximately 280 basis points from recent generic drug introductions and by approximately 190 basis points from the implementation of Specialty Connect®. The implementation of Specialty Connect had a greater effect on revenues than prescription volumes due to the higher dollar value of specialty products.

Guidance:

CVS Health sees FY2015 EPS of $5.08-$5.19, versus the consensus of $5.16.

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