A view of the CVS Health Customer Support Center logo at the CVS headquarters of CVS Health in Woonsocket, Rhode Island, USA on October 30, 2023.
Faith Ninivaji | Reuters
long time CVS Health CVS announced Friday that executive David Joyner has succeeded Karen Lynch as chief executive as the company struggles to improve profits and stock performance.
The move took effect on Thursday, the day before the announcement, at a time when CVS shares have fallen nearly 20% this year. The stock plunged about 11% in premarket trading Friday.
CVS faces challenges Its insurance unit Aetna has been pressured by higher medical costs and consumer spending at its retail pharmacies has fallen. August, company Substantially lowered full-year profit guidance It also said it would cut $2 billion in costs over the next few years.
CVS also said in a news release Friday that it expects third-quarter adjusted earnings per share to be in a range of $1.05 to $1.10. Medical costs are expected to be higher than previously expected, with the so-called medical benefit rate for the quarter at 95.2%.
CVS said in a press release: “Given continued elevated medical cost pressures in the health care benefits space, investors should no longer rely on the information previously provided by the company during its second quarter 2024 earnings call on August 7, 2024. guide.
The company is scheduled to announce third-quarter earnings on November 6.
Last month, CVS majority owner Glenview Capital Start vigorously promoting changes in the company, CNBC previously reported .
CNBC reported last month that CVS board hires strategic advisor Weighing its options, including the possibility of splitting its insurance and retail businesses.
Joyner most recently served as president of CVS Caremark, overseeing the company’s pharmacy services business, a similar role that Lynch held before taking the top job in February 2021. Served as senior executive vice president of sales and marketing at CVS Health.
Chairman Roger Farah said: “We believe David and his deep understanding of our combined businesses can help us address the challenges facing our industry more directly, more quickly advance the operational improvements the company needs, and fully realize The value we can uniquely create.
Lynch also resigned from the company’s board of directors this week, the company said Friday. Joyner will have a seat on the board of directors and Farah will serve as executive chairman.
—CNBC’s Annika Kim Constantino and Rohan Goswami contributed to this report.
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