CVS Health Appoints David Joyner President and Chief Executive Officer
CVS Health announced the appointment of David Joyner as President and CEO, effective October 17, replacing Karen Lynch. Roger Farah was named Executive Chairman of the Board. Joyner, with 37 years of healthcare experience, previously served as executive vice president of CVS Health and president of CVS Caremark.
The company provided preliminary guidance for Q3 2024, projecting GAAP diluted EPS of $0.03 to $0.08 and Adjusted EPS of $1.05 to $1.10. This includes charges of approximately $1.1 billion for premium deficiency reserves, primarily related to Medicare and Individual Exchange businesses, lowering Q3 2024 Adjusted EPS by $0.63. A restructuring charge of about $1.2 billion is also expected, related to store closures and cost reduction actions.
CVS Health reported continued elevated medical cost trends, with an expected Medical Benefit Ratio of approximately 95.2% for Q3. The company plans to provide further updates on its Q3 2024 earnings call scheduled for November 6, 2024.
CVS Health ha annunciato la nomina di David Joyner come Presidente e CEO, con effetto dal 17 ottobre, sostituendo Karen Lynch. Roger Farah è stato nominato Presidente Esecutivo del Consiglio. Joyner, con 37 anni di esperienza nel settore sanitario, ha precedentemente ricoperto il ruolo di vicepresidente esecutivo di CVS Health e presidente di CVS Caremark.
L'azienda ha fornito indicazioni preliminari per il terzo trimestre del 2024, prevedendo un EPS diluito GAAP di $0.03 a $0.08 e un EPS rettificato di $1.05 a $1.10. Questo include oneri di circa $1.1 miliardi per riserve di carenza di premi, principalmente legati ai business di Medicare e Exchange Individuali, riducendo l'EPS rettificato del terzo trimestre 2024 di $0.63. È prevista anche una spesa di ristrutturazione di circa $1.2 miliardi, legata alla chiusura di negozi e alle azioni di riduzione dei costi.
CVS Health ha riportato tendenze continue di costi medici elevati, con un rapporto di benefici medici previsto di circa 95.2% per il Q3. L'azienda prevede di fornire ulteriori aggiornamenti sulla sua chiamata sugli utili del terzo trimestre 2024 programmata per il 6 novembre 2024.
CVS Health anunció el nombramiento de David Joyner como Presidente y CEO, a partir del 17 de octubre, en reemplazo de Karen Lynch. Roger Farah fue nombrado Presidente Ejecutivo de la Junta. Joyner, con 37 años de experiencia en el sector de la salud, anteriormente fue vicepresidente ejecutivo de CVS Health y presidente de CVS Caremark.
La empresa proporcionó guías preliminares para el tercer trimestre de 2024, proyectando un EPS diluido GAAP de $0.03 a $0.08 y un EPS ajustado de $1.05 a $1.10. Esto incluye cargos de aproximadamente $1.1 mil millones por reservas de deficiencia de primas, principalmente relacionadas con Medicare y negocios de Exchange Individual, lo que reduces el EPS ajustado para el tercer trimestre de 2024 en $0.63. También se espera un cargo de reestructuración de aproximadamente $1.2 mil millones, relacionado con el cierre de tiendas y acciones de reducción de costos.
CVS Health reportó tendencias sostenidas de costos médicos elevados, con un ratio de Beneficios Médicos esperado de aproximadamente 95.2% para el tercer trimestre. La empresa planea proporcionar actualizaciones adicionales en su llamada de ganancias del tercer trimestre de 2024 programada para el 6 de noviembre de 2024.
CVS 헬스는 데이비드 조이너를 10월 17일부터 사장 겸 CEO로 임명한다고 발표했으며, 카렌 린치를 대체합니다. 로저 파라가 이사회 의장으로 임명되었습니다. 조이너는 37년의 의료 경험을 보유하고 있으며, 이전에는 CVS 헬스의 부사장과 CVS 케어마크의 회장을 역임했습니다.
회사는 2024년 3분기에 대한 초기 지침을 제공했으며, GAAP 희석 EPS는 $0.03에서 $0.08까지, 조정 EPS는 $1.05에서 $1.10까지 예상하고 있습니다. 여기에는 주로 메디케어 및 개인 거래소 사업과 관련된 약 $11억 달러의 프리미엄 부족 준비금에 대한 비용이 포함되어 있어 2024년 3분기의 조정 EPS를 $0.63 낮추게 됩니다. 또한 매장 폐쇄 및 비용 절감 조치와 관련하여 약 $12억 달러의 구조조정 비용이 예상됩니다.
CVS 헬스는 높은 의료 비용 추세가 지속되고 있다고 보고했으며, 3분기의 의료 혜택 비율은 약 95.2%로 예상됩니다. 회사는 2024년 11월 6일에 예정된 3분기 실적 발표 전화에서 추가 업데이트를 제공할 계획입니다.
CVS Health a annoncé la nomination de David Joyner au poste de Président et CEO, à compter du 17 octobre, remplaçant Karen Lynch. Roger Farah a été nommé Président Exécutif du Conseil. Joyner, fort de 37 ans d'expérience dans le secteur de la santé, a précédemment occupé le poste de vice-président exécutif de CVS Health et de président de CVS Caremark.
L'entreprise a fourni des orientations préliminaires pour le troisième trimestre 2024, prévoyant un BPA dilué GAAP de 0,03 $ à 0,08 $ et un BPA ajusté de 1,05 $ à 1,10 $. Cela inclut des charges d'environ 1,1 milliard de dollars pour des réserves de carence de prime, principalement liées aux activités de Medicare et d'échange individuel, abaissant le BPA ajusté pour le troisième trimestre 2024 de 0,63 $. Une charge de restructuration d'environ 1,2 milliard de dollars est également attendue, liée à des fermetures de magasins et à des actions de réduction des coûts.
CVS Health a signalé des tendances de coûts médicaux toujours élevées, avec un ratio de bénéfices médicaux d'environ 95,2 % prévu pour le troisième trimestre. L'entreprise prévoit de fournir d'autres mises à jour lors de sa conférence téléphonique sur les résultats du troisième trimestre 2024 prévue pour le 6 novembre 2024.
CVS Health gab die Ernennung von David Joyner zum Präsidenten und CEO bekannt, wirksam zum 17. Oktober, und ersetzt Karen Lynch. Roger Farah wurde zum Executive Chairman des Vorstands ernannt. Joyner bringt 37 Jahre Erfahrung im Gesundheitswesen mit und war zuvor als Executive Vice President von CVS Health und Präsident von CVS Caremark tätig.
Das Unternehmen gab vorläufige Richtlinien für das dritte Quartal 2024 bekannt und rechnet mit einem GAAP verwässerten EPS zwischen $0.03 und $0.08 sowie einem angepassten EPS von $1.05 bis $1.10. Dies beinhaltet Kosten von etwa $1.1 Milliarden für Prämienmangelreserven, die hauptsächlich mit Medicare und individuellen Austauschgeschäften verbunden sind, was das angepasste EPS für das dritte Quartal 2024 um $0.63 senkt. Es wird auch ein Restrukturierungsaufwand von etwa $1.2 Milliarden erwartet, der mit Filialschließungen und Kostensenkungsmaßnahmen in Verbindung steht.
CVS Health berichtete von weiterhin hohen medizinischen Kostenentwicklungen, mit einem erwarteten medizinischen Leistungsanteil von etwa 95.2% für das dritte Quartal. Das Unternehmen plant, am 6. November 2024 weitere Aktualisierungen während seiner Telefonkonferenz zu den Ergebnissen des dritten Quartals 2024 bereitzustellen.
- Appointment of experienced healthcare executive David Joyner as new CEO
- Projected Q3 2024 Adjusted EPS of $1.05 to $1.10
- Expected substantial release of premium deficiency reserves in Q4 2024, benefiting results
- Q3 2024 GAAP diluted EPS projected at only $0.03 to $0.08
- Charges of $1.1 billion for premium deficiency reserves, lowering Q3 Adjusted EPS by $0.63
- Restructuring charge of $1.2 billion related to store closures and cost reduction actions
- Elevated medical cost trends continuing in Q3 2024
- High Medical Benefit Ratio of approximately 95.2% for Q3
- Previous guidance no longer reliable due to continued medical cost pressures
Roger Farah Named Executive Chairman of the Board
Company provides preliminary guidance for third quarter 2024 GAAP diluted Earnings per Share (EPS) of
Joyner was most recently executive vice president, CVS Health, and president, CVS Caremark. He led the pharmacy services business, which provides solutions to employers, health plans and government entities and serves approximately 90 million members through Caremark, CVS Specialty, and other areas.
Joyner has 37 years of health care and pharmacy benefit management experience, and has also served on the boards of several private equity-backed health care companies. He began his career at Aetna as an employee benefit representative before joining Caremark Prescription Services as a regional sales manager. He then served as executive vice president of sales and account services at CVS Caremark and executive vice president of sales and marketing at CVS Health.
"The Board believes this is the right time to make a change, and we are confident that David is the right person to lead our company for the benefit of all stakeholders, including customers, employees, patients, and shareholders," said Farah. "CVS Health is responsible for improving health for millions of people across the
"There is no greater honor than to lead a company whose mission and purpose are completely focused on improving health," said Joyner. "I came back to CVS Health in 2023 because I believed I could give more to the company, and I take this opportunity today for the same reason. I am proud to continue working side by side with our 300,000 colleagues who are building a world of health around every consumer. Every day, CVS Health expands access, drives greater affordability, and achieves better health outcomes for more than 186 million people. Aligned with our management team and our Board, I believe in the future of our company and I am committed to delivering our best every day to everyone we serve."
Farah added: "The Board also recognizes the many contributions Karen made to our company, both during her tenure at Aetna and then as President and CEO of CVS Health. We are grateful for her consistent, customer-focused leadership, especially during the COVID-19 pandemic when our pharmacies provided needed tests and vaccines. We also appreciate her work to advance CVS Health's modernization and transformation to become a diversified, connected, technology-driven health care company, allowing us to do even more for the people we are privileged to serve."
In connection with today's announcement, the Company is also providing preliminary guidance for third quarter 2024 GAAP diluted EPS of
In the third quarter of 2024, the Company has continued to experience medical cost trends in excess of those projected in its prior outlook. The Medical Benefit Ratio ("MBR") for the third quarter is currently expected to be approximately
The Company's preliminary financial results are based on the Company's current estimate of its results for the quarter ended September 30, 2024, and remain subject to change based on the completion of closing and review procedures and the execution of the Company's internal control over financial reporting.
Non-GAAP Financial Measures
This press release includes projected Adjusted EPS, which represents a non-GAAP financial measure. The Company uses non-GAAP financial measures to analyze underlying business performance and trends. The Company believes that providing non-GAAP financial measures enhances the Company's and investors' ability to compare the Company's past financial performance with its current performance. Non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP. The Company's definitions of its non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies. The most directly comparable GAAP measure is projected GAAP diluted EPS.
Projected GAAP diluted EPS and projected Adjusted EPS, respectively, are calculated by dividing projected net income attributable to CVS Health and projected adjusted income attributable to CVS Health by the Company's projected weighted average diluted shares outstanding. The Company defines adjusted income attributable to CVS Health as net income attributable to CVS Health (GAAP measure) excluding the impact of amortization of intangible assets, net realized capital gains or losses and other items, if any, that neither relate to the ordinary course of the Company's business nor reflect the Company's underlying business performance, such as acquisition-related integration costs, restructuring charges, office real estate optimization charges, as well as the corresponding tax benefit or expense related to the items excluded from adjusted income attributable to CVS Health.
The following are reconciliations of projected net income attributable to CVS Health to adjusted income attributable to CVS Health and projected GAAP diluted EPS to Adjusted EPS:
Three Months Ended September 30, 2024 | ||||
Low | High | |||
In millions, except per share amounts | Total | Per Common | Total | Per Common |
Net income attributable to CVS Health (GAAP measure) | $ 40 | $ 0.03 | $ 103 | $ 0.08 |
Amortization of intangible assets | 507 | 0.40 | 507 | 0.40 |
Net realized capital gains | (19) | (0.02) | (19) | (0.02) |
Acquisition-related integration costs (1) | 41 | 0.03 | 41 | 0.03 |
Restructuring charges (2) | 1,169 | 0.93 | 1,169 | 0.93 |
Office real estate optimization charges (3) | 17 | 0.01 | 17 | 0.01 |
Tax impact of non-GAAP adjustments (4) | (433) | (0.33) | (433) | (0.33) |
Adjusted income attributable to CVS Health | $ 1,322 | $ 1.05 | $ 1,385 | $ 1.10 |
Weighted average diluted shares outstanding | 1,259 | 1,259 | ||
(1) | During the three months ended September 30, 2024, the acquisition-related integration costs relate to the acquisitions of Signify Health and Oak Street Health. |
(2) | During the three months ended September 30, 2024, the restructuring charges are primarily comprised of a store impairment charge, other asset impairment and related charges associated with the discontinuation of certain non-core assets, as well as corporate workforce optimization costs, including severance and employee-related costs. During the third quarter of 2024, the Company developed an enterprise-wide restructuring plan intended to streamline and simplify the organization, improve efficiency and reduce costs. In connection with this restructuring plan, the Company completed a strategic review of its retail business and determined that it would close 271 additional retail stores, and, accordingly, it recorded a store impairment charge to write down the associated operating lease right-of-use assets and property and equipment. In addition, during the third quarter of 2024, the Company also conducted a review of its various strategic assets and determined that it would discontinue the use of certain non-core assets, at which time impairment losses were recorded to write down the carrying value of these assets to the Company's best estimate of their fair value. |
(3) | During the three months ended September 30, 2024, the office real estate optimization charges primarily relate to the abandonment of leased real estate and the related right-of-use assets and property and equipment in connection with the Company's continuous evaluation of corporate office real estate space in response to its ongoing flexible work arrangement. |
(4) | Represents the corresponding tax benefit or expense related to the items excluded from Adjusted EPS above. The nature of each non-GAAP adjustment is evaluated to determine whether a discrete adjustment should be made to the adjusted income tax provision. |
Cautionary Statement Concerning Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of CVS Health Corporation. Statements in this press release that are forward-looking include, but are not limited to, references to CVS Health's estimates for certain financial metrics for the three months ended September 30, 2024 presented in this press release, all of which are preliminary. By their nature, all forward-looking statements are not guarantees of future performance or results and are subject to risks and uncertainties that are difficult to predict and/or quantify. Actual results may differ materially from those contemplated by the forward-looking statements due to the risks and uncertainties described in our Securities and Exchange Commission filings, including those set forth in the Risk Factors section and under the heading "Cautionary Statement Concerning Forward-Looking Statements" in our most recently filed Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
You are cautioned not to place undue reliance on CVS Health's forward-looking statements. CVS Health's forward-looking statements are and will be based upon management's then-current views and assumptions regarding preliminary financial estimates and projections, future events and operating performance, and are applicable only as of the dates of such statements. CVS Health does not assume any duty to update or revise forward-looking statements, whether as a result of new information, future events, uncertainties or otherwise.
About CVS Health
CVS Health® is the leading health solutions company, delivering care like no one else can. We reach more people and improve the health of communities across America through our local presence, digital channels and over 300,000 dedicated colleagues — including more than 40,000 physicians, pharmacists, nurses and nurse practitioners. Wherever and whenever people need us, we help them with their health — whether that's managing chronic diseases, staying compliant with their medications or accessing affordable health and wellness services in the most convenient ways. We help people navigate the health care system — and their personal health care — by improving access, lowering costs and being a trusted partner for every meaningful moment of health. And we do it all with heart, each and every day. Follow @CVSHealth on social media.
Media contact
Ethan Slavin
860-273-6095
Ethan.Slavin@CVSHealth.com
Investor contact
Larry McGrath
800-201-0938
InvestorInfo@CVSHealth.com
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SOURCE CVS Health
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