Revenue during the quarter grew 15.45 percent to $44,615 million from $38,644 million in the previous year period. Gross margin for the quarter contracted 44 basis points over the previous year period to 16.79 percent. Total expenses were 93.69 percent of quarterly revenues, down from 93.97 percent for the same period last year. This has led to an improvement of 28 basis points in operating margin to 6.31 percent.

Operating income for the quarter was $2,817 million, compared with $2,331 million in the previous year period.

President and chief executive officer Larry Merlo stated, "We posted a solid third quarter with the PBM exceeding our expectations and retail performing at the lower end of our expectations. However, very recent pharmacy network changes in the marketplace are expected to cause some retail prescriptions to begin migrating out of our pharmacies this quarter. In addition, we are currently experiencing slowing prescription growth in the overall market as well as a soft seasonal business. These factors combined are leading us to reduce the mid-point of our guidance for this year by five cents per share. The network changes have more significant implications for our 2017 outlook. While we expect a healthy increase in PBM operating profit growth in 2017, we expect a decrease in retail operating profit growth."

For fiscal year 2016, CVS Health Corporation expects diluted earnings per share to be in the range of $4.84 to $4.90. It expects diluted earnings per share to be in the range of $5.77 to $5.83 on adjusted basis.

For the fourth-quarter, CVS Health Corporation expects diluted earnings per share to be in the range of $1.52 to $1.58. It expects diluted earnings per share to be in the range of $1.64 to $1.70 on adjusted basis for the same period.

The company has spent $1,652 million cash to meet investing activities during the nine month period as against cash outgo of $11,000 million in the last year period. It has incurred net capital expenditure of $1,585 million on net basis during the nine month period, up 8.41 percent or $123 million from year ago period.

The company has spent $6,568 million cash to carry out financing activities during the nine month period as against cash inflow of $6,576 million in the last year period.

Cash and cash equivalents stood at $2,189 million as on Sep. 30, 2016, down 24.26 percent or $701 million from $2,890 million on Sep. 30, 2015.

Working capital drops significantly
CVS Health Corporation has witnessed a decline in the working capital over the last year. It stood at $4,198 million as at Sep. 30, 2016, down 54.95 percent or $5,121 million from $9,319 million on Sep. 30, 2015. Current ratio was at 1.16 as on Sep. 30, 2016, down from 1.43 on Sep. 30, 2015.

Cash conversion cycle (CCC) has decreased to 26 days for the quarter from 46 days for the last year period. Days sales outstanding went down to 25 days for the quarter compared with 28 days for the same period last year.

Days inventory outstanding has decreased to 18 days for the quarter compared with 37 days for the previous year period. At the same time, days payable outstanding went down to 17 days for the quarter from 19 for the same period last year.