CVS Health, in an announcement accompanied by preliminary third-quarter financials, reported it appointed David Joyner president and CEO, replacing Karen Lynch, who stepped down from her position in agreement with the company’s board of directors.
Joyner also has taken a position on the board of directors. Previous CVS Chairman Roger Farah has become executive chairman.
Joyner most recently was executive vice president, CVS Health, and president, CVS Caremark. He led the pharmacy services business, which works with employers, health plans and government entities, serving 90 million members through Caremark, CVS Specialty and other CVS operations.
CVS third-quarter preliminary guidance includes GAAP diluted earnings per share of three to eight cents and adjusted EPS of $1.05 to $1.10. Results for the third quarter include charges to record premium deficiency reserves primarily related to the company’s Medicare and Individual Exchange businesses inside its Health Care Benefits segment, of approximately $1.1 billion, which lowered third quarter 2024 adjusted EPS by 63 cents. CVS expects the PDRs to be substantially released during the fourth quarter, benefiting results in that period. The company’s GAAP results also include a restructuring charge of approximately $1.2 billion, related to incremental store closures in 2025, as well as cost reduction actions.
CVS has continued to experience medical cost trends in excess of those projected in its prior outlook, the company indicated. As it released second quarter results, CVS revised full-year GAAP diluted EPS guidance to a range of $4.95 to $5.20 from at least $5.64 and adjusted EPS guidance to a range of $6.40 to $6.65 from at least $7.
In a recent research note, Morgan Stanley analyst Erin Wright responded to rumors that the CVS board has considered a separation of the store and benefits/insurance sides of its business, a combination originally made as CVS moved to becoming a health care and maintenance operation. Payments and costs in the Medicare Advantage part of the Health Care Benefits segment of the operation have been higher than anticipated and a drag on financials. CVS acquired pharmacy benefits manager Caremark in 2007, insurer Aetna in 2018 and health services provider Oak Street last year.
“The board believes this is the right time to make a change, and we are confident that David (Joyner) is the right person to lead our company for the benefit of all stakeholders, including customers, employees, patients, and shareholders,” Farah said. “CVS Health is responsible for improving health for millions of people across the U.S., and our integrated businesses work together to deliver on our purpose and mission every day. To build on our position of strength, we believe (Joyner) 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.”
