CVS Health Corp (NYSE:CVS) shares plunged more than 7% in early trade as the pharmaceutical chain announced it is replacing its CEO Karen Lynch with company veteran David Joyner, effective immediately.
Joyner has most recently served as executive vice president of CVS Health and president of CVS Caremark, CVS said on Friday.
The board believes “this is the right time to make a change,” chairman Roger Farah said in a statement.
“To build on our position of strength, we believe David and his deep understanding of our integrated business can help us more directly address the challenges our industry faces, more rapidly advance the operational improvements our company requires, and fully realize the value we can uniquely create.”
The company also guided lower-than-expected profits for the third quarter.
It guided adjusted earnings per share (EPS) between $1.05 and $1.10, below Wall Street estimates of $1.69.
This includes a $1.1 billion charge for premium deficiency reserves (PDRs) tied to the Medicare and Individual Exchange businesses, reducing adjusted EPS by $0.63. These PDRs are anticipated to be largely released in Q4 2024, improving results for that period.
CVS will report its Q3 earnings on November 6.