On Friday, CVS Health Inc (NYSE:CVS) named long-time CEO David Joyner replaced as the new President and CEO Karen Lynch amid the company's ongoing financial difficulties.

Joyner, previously president of CVS Caremark and executive vice president of the company, assumes this leadership role as Roger FarahCEO of CVS, assumes the position of CEO.

The company warned that its upcoming third-quarter results, scheduled to be released on November 6, will miss Wall Street forecasts.

The company reported preliminary adjusted earnings per share of $1.05 to $1.10 for the third quarter of 2024, compared to consensus of $1.70. Analysts expect sales of $92.73 billion.

Included in the third quarter results are charges for the recognition of premium defense reserves (PDRs) of approximately $1.1 billion, primarily related to the Company's Medicare and Individual Exchange businesses within its Health Care Benefits segment, which reduced adjusted earnings per share by $0.63 in the third quarter of 2024.

In the third quarter of 2024, CVS continued to experience medical cost trends above those projected in its previous forecast.

The third quarter medical benefit ratio is currently expected to be approximately 95.2%, including a 220 basis point impact from PDRs.

The company added: “Given continued elevated medical cost pressures in the health benefits segment, investors should no longer rely on the company's previous forecasts.”

The pharmacy giant also deviates from the 2024 financial year, which was published in the publication of the results for the second quarter.

The company reported second-quarter revenue of $91.23 billion, missing the consensus of $91.51 billion. Adjusted earnings per share fell to $1.83 from $2.21 a year ago, beating the consensus of $1.73.

In the second quarter, CVS Health revised its 2024 adjusted earnings per share forecast to between $6.40 and $6.65 from at least $7.00, versus a consensus of $6.98.

CVS Health forecast 2024 revenue of $369.0 billion – $372.0 billion versus consensus of $368.876 billion with a previous forecast of at least $369 billion.

The company expected a medical benefit rate of 90.6% – 90.8% versus ~89.8% previously expected.

The company is already struggling, as the Federal Trade Commission (FTC) has filed a formal complaint against three major pharmacy benefit managers (PBMs) – CVS Health's Caremark, Cigna Corp (NYSE:CI) Express Scripts and UnitedHealth Group Inc (NYSE:UNH) Optum – for allegedly engaging in unfair and anticompetitive practices that drove up the list price of insulin medications.

The story continues

CVS Health is also considering a major restructuring that could include separating its retail and insurance businesses, according to an October report.

These discussions with financial advisors explore how a potential separation would work, although no final decisions have been made.

Price promotion: At last check on Friday, CVS shares were down 12.30% at $55.87 in premarket trading.

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This article Pharmacy retailer CVS Health deviates from full-year guidance and names new CEO. It originally appeared on Benzinga.com

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