New tax law will help Woonsocket’s largest employer with $1.2 billion in cash flow

New tax law will help Woonsocket’s largest employer with $1.2 billion in cash flow

WOONSOCKET – CVS Health Corp. will have an expected $1.2 billion more in cash flow under the country’s new tax law, according to an outlook issued by the company last week.

The company noted that its new tax rate will be 27 percent this year, down from 39 percent in 2017. The money saved will be used for strategic investments, according to CVS officials, who pointed to the proposed acquisition of health insurer Aetna Inc., expected to close during the second half of 2018.

The business projects that its consolidated net revenue will grow somewhere between 0.75 percent and 2.5 percent with retail/LTC revenue increasing by 2.5 to 4 percent for the year. CVS’s same-store sales will grow from 2 to 3.5 percent, and same-store adjusted scripts from 6 to 7 percent, according to the outlook. Pharmacy services are expected to show growth of 1.5 to 3.5 percent.

The projection notes that the company expects profit to be adversely affected by costs associated with the implementation of its contract with Anthem Inc.

CVS reported that it recorded $4.4 billion in share repurchases, $600 million short of the $5 billion anticipated in 2017. The outlook noted that company officials expect the difference to be offset by a better than expected effective tax rate during the fourth quarter of 2017.