Revenue during the quarter grew 3.01 percent to $44,514 million from $43,215 million in the previous year period. Gross margin for the quarter contracted 82 basis points over the previous year period to 14.78 percent. Total expenses were 95.97 percent of quarterly revenues, up from 94.94 percent for the same period last year. That has resulted in a contraction of 103 basis points in operating margin to 4.03 percent.

Operating income for the quarter was $1,793 million, compared with $2,185 million in the previous year period.

President and Chief Executive Officer Larry Merlo said, "2017 is off to a solid start as we posted results this quarter that surpassed our expectations. At the same time, we generated $3.1 billion of free cash and continued to return value to our shareholders through high-return investments in our business as well as dividends and share repurchases. However, while we are pleased with our financial performance versus our expectations, we won’t be satisfied until the company returns to sustainable, healthy earnings growth."

CVS Health Corporation expects adjusted net income to be in the range of $1,325 million to $1,371 million for the second-quarter. For the financial year 2017, CVS HEALTH Corp expects adjusted net income to be in the range of $5,954 million to $6,110 million. On an adjusted basis, the company expects diluted earnings per share to be in the range of $1.29 to $1.33 for the second-quarter. For fiscal year 2017, the company expects diluted earnings per share to be in the range of $5.77 to $5.93 on adjusted basis.

The company has spent $554 million cash to meet investing activities during the quarter as against cash outgo of $633 million in the last year period. It has incurred net capital expenditure of $452 million on net basis during the quarter, down 24.16 percent or $144 million from year ago period.

The company has spent $4,133 million cash to carry out financing activities during the quarter as against cash outgo of $2,487 million in the last year period.

Cash and cash equivalents stood at $2,217 million as on Mar. 31, 2017, up 24.62 percent or $438 million from $1,779 million on Mar. 31, 2016.

Working capital drops significantly
CVS Health Corporation has witnessed a decline in the working capital over the last year. It stood at $2,169 million as at Mar. 31, 2017, down 55.52 percent or $2,707 million from $4,876 million on Mar. 31, 2016. Current ratio was at 1.08 as on Mar. 31, 2017, down from 1.20 on Mar. 31, 2016.

Cash conversion cycle (CCC) has decreased to 24 days for the quarter from 43 days for the last year period. Days sales outstanding went down to 24 days for the quarter compared with 26 days for the same period last year.

Days inventory outstanding has decreased to 17 days for the quarter compared with 35 days for the previous year period. At the same time, days payable outstanding was almost stable at 18 days for the quarter, when compared with the previous year period.