CVS Health's New CEO Faces Challenges in First Quarter

CVS Health had a mixed third quarter, with increased medical costs hurting profits. This is the first report under new CEO David Joyner, who's trying to turn things around. The company expects these costs to stay high until the end of the year. They wouldn't give a formal outlook, but will share some ideas during the earnings call. Joyner wants to gain investor trust by providing realistic goals. Wall Street has lost confidence in CVS due to three straight quarters of cut guidance. Shares are down 27% this year. Higher costs in the health insurance unit, Aetna, are a big issue. Seniors are going back to hospitals for delayed procedures post-pandemic. CVS named Steve Nelson, ex-CEO of UnitedHealthcare, as Aetna's new president. They both need to convince investors that the company can manage costs better. Prem Shah, a longtime CVS executive, is taking on a bigger role overseeing the retail pharmacy, pharmacy benefits, and healthcare delivery businesses. Shares rose 6% before the market opened on Wednesday. The company earned $1. 09 per adjusted share, lower than expected $1. 51. Revenue was $95. 43 billion, beating the expected $92. 75 billion. Net income dropped to $71 million, from $2. 27 billion last year. There were charges for premium deficiency reserves and restructuring, which affected earnings. CVS plans to close more stores and cut jobs to save $2 billion. They expect to release most of the premium deficiency reserves in the fourth quarter, helping results then.