CVS Aetna

The financial data indicates that CVS-Aetna will probably make money. For example, Aetna reported a gross profit of $4.5 billion on revenues of $15.561 billion for 2nd Quarter 2018.

In addition, CVS Health recorded a gross profit of $7.201 billion on revenues of $46.78 billion for 2nd Quarter 2018. Therefore, CVS-Aetna could generate a quarterly gross profit of $11.7 billion and quarterly revenues of $62.341 billion.

However, CVS Health recorded an operating loss of -$1.590 billion and a net loss of -$2.563 billion for 2nd Quarter 2018. Meanwhile, Aetna recorded an operating income of $1.684 billion and a net income of $1.212 billion for 2nd Quarter 2018.

Thus, cynics will argue that CVS is trying to cover its losses by buying Aetna. This argument is unconvincing because Aetna-CVS could make an operating income of $94 million and a net loss of -$1.351 billion.

Hence, CVS-Aetna will lose money with the financial numbers both companies reported on June 30, 2018. That makes CVS-Aetna a very dubious stock from a value investor’s standpoint.