(Reuters) – CVS Health on Friday withdrew its 2024 profit forecast and announced that company veteran David Joyner will replace Karen Lynch as CEO, leaving him with a major challenge to turn around the healthcare conglomerate’s weak performance.
Shares fell 11% in premarket trading, adding to this year’s losses, as CVS also forecast adjusted quarterly profit to come in below estimates. Shareholders have become increasingly nervous this year about repeated cuts to earnings estimates, as drugstores face reimbursement pressure and the health insurance industry faces high costs.
Glenview Capital is among investors pushing for changes at the company to help improve its operations as it faces one of the most challenging periods in its 60-year history.
Lynch stepped down from her position in consultation with CVS Health’s board, the company said.
Joyner, president of CVS Caremark, the company’s pharmacy benefits manager, will take over as president and CEO effective Friday.
“The board believes that now is the right time to make change, and we are confident that David is the right person to lead our company,” said Chairman Roger Farah.
CVS expects third-quarter adjusted earnings of $1.05 to $1.10 per share, well below the average of analyst estimates of $1.70, according to data compiled by LSEG.
The healthcare giant is also exiting its core infusion services business and plans to close or sell 29 related regional pharmacies in the coming months, Reuters reported earlier this week.
The Wall Street Journal first reported Joyner’s appointment on Friday.
(Reporting by Leroy Leo and Sriparna Roy in Bengaluru; Editing by Maju Samuel and Devika Syamnath)