On Friday, CVS Health Inc (NYSE:CVS) appointed longtime executive David Joyner as its latest president and CEO, replacing Karen Lynch amid the corporate’s ongoing financial struggles.
Joyner, previously president of CVS Caremark and an executive vp at the corporate, steps into this leadership role as Roger Farah, CVS’s board chairman, assumes the manager chair position.
The corporate warned that its upcoming third-quarter earnings, set for release on November 6, will miss Wall Street projections.
The corporate revealed preliminary third-quarter 2024 adjusted EPS of $1.05-$1.10, in comparison with the consensus of $1.70. Analysts expect sales of $92.73 billion.
Results for the third quarter include charges to record premium deficiency reserves (PDRs), primarily related to the corporate’s Medicare and Individual Exchange businesses inside its Health Care Advantages segment, of roughly $1.1 billion, which lowered third quarter 2024 Adjusted EPS by $0.63.
Within the third quarter of 2024, CVS continued to experience medical cost trends over those projected in its prior outlook.
The Medical Profit Ratio for the third quarter is currently expected to be roughly 95.2%, which incorporates a 220-basis point impact from the PDRs.
The corporate added, ” In light of continued elevated medical cost pressures within the Health Care Advantages segment, investors should not depend on the corporate’s previous guidance.”
The pharmacy giant can be backing away from the fiscal yr 2024 issued throughout the second-quarter earnings release.
The corporate reported second-quarter sales of $91.23 billion, missing the consensus of $91.51 billion. Adjusted EPS of $1.83 decreased from $2.21 within the prior yr, beating the consensus of $1.73.
In Q2 earnings, CVS Health revised its 2024 adjusted EPS guidance to $6.40-$6.65 from at the least $7.00 versus consensus of $6.98.
CVS Health forecasted 2024 sales of $369.0 billion—$372.0 billion versus a consensus of $368.876 billion at prior guidance of at the least $369 billion.
The corporate expected a medical advantages ratio of 90.6% – 90.8% versus ~89.8% expected earlier.
The corporate is already struggling because the Federal Trade Commission (FTC) filed a proper criticism against three major pharmacy profit managers (PBMs)—CVS Health’s Caremark, Cigna Corp’s (NYSE:CI) Express Scripts, and UnitedHealth Group Inc’s (NYSE:UNH) Optum—for allegedly engaging in unfair and anti-competitive practices which have inflated the list price of insulin medications.
As per an October report, CVS Health can be considering a significant restructuring that might involve separating its retail and insurance businesses.
These talks with financial advisers explore how a possible breakup would work, although no final decisions have been made yet.
Price Motion: Eventually check on Friday, CVS stock was down 12.30% at $55.87 throughout the premarket session.
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This text Pharmacy Retailer CVS Health Backs Away From Annual Forecast, Names Recent CEO originally appeared on Benzinga.com
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