The Associated Press

CVS Health missed first-quarter expectations and chopped its 2024 outlook more than a dollar below Wall Street’s forecast.

Shares of the health care giant plunged Wednesday morning after the company said it was still struggling with rising costs from care use in its Medicare Advantage business.

Company leaders told analysts they were still dealing with rising use from outpatient care and in supplemental benefits. The company also saw some new pressure from inpatient care.

CEO Karen Lynch said the company’s visibility into trends during the quarter was impaired by the cyberattack on Change Healthcare, which is operated by rival UnitedHealth Group. Change provides provides technology used to submit and process insurance claims for several insurers.

CVS Health had already scaled back 2024 expectations earlier this year as it worked to understand why costs keep rising from Medicare Advantage, the privately run version of Medicare, the government’s program which is for people age 65 and older.

Company leaders said Wednesday they aren’t seeing the same pressure from its commercial insurance business, which includes plans sold to employers and on individual insurance exchanges.

CVS Health said it now expects adjusted earnings for 2024 to be at least $7, down its previous forecast of at least $8.30.

Analysts had been forecasting earnings of $8.27 per share, according to FactSet.

The guidance reduction was much more significant than expected, according to Leerink analyst Michael Cherny. He said in a research note that it raises questions about the company’s path to reaching its previously stated goal of double-digit growth in earnings per share next year.

In the first quarter, CVS Health’s net income plunged 48% to $1.11 billion. It booked adjusted earnings of $1.31 per share on total revenue of $88.4 billion.

Analysts expected earnings of $1.69 per share on $89.33 billion in revenue for the first quarter.

CVS Health Corp. runs one of the nation’s largest drugstore chains and a huge pharmacy benefit management business that operates prescription drug coverage for big clients like insurers and employers. It also covers more than 26 million people with health insurance through its Aetna arm. That includes the Medicare Advantage business.

Shares of the Woonsocket, Rhode Island-based company were down more than 11% to $59.82 in premarket trading. The stock price had already fallen 14% in the first four months of the year while the Dow Jones industrial has climbed slightly.