CVS Health has chopped its 2024 forecast for a third time as the health care giant continues to struggles with its health insurance business.
The leader of that segment, Executive Vice President Brian Kane, has left the company, CVS said Wednesday, and CEO Karen Lynch would take over.
The company’s adjusted operating income from that segment plunged 39% in the quarter to $938 million, helping to drag down the company’s overall profit. CVS Health has been struggling with rising claims in its Medicare Advantage business and a drop in quality ratings for those plans, which affects government funding for them.
CVS Health said it also dealt with higher costs from people covered by the state and federally funded Medicaid program.
Overall, the company’s profit dropped more than 7% to $1.77 billion in the quarter.
CVS Health had adjusted earnings of $1.83 per share on $91.2 billion in revenue. Analysts projected earnings of $1.73 per share on $91.41 billion in revenue.
CVS Health now expects adjusted per-share earnings for the year to be between $6.40 and $6.65. The company in May cut its per-share expectations to at least $7.
Wall Street had been expecting per-share earnings of $6.96, according to FactSet.
CVS Health Corp. runs one of the nation’s largest drugstore chains and a huge pharmacy benefit management business that operates prescription drug coverage for big clients like insurers and employers. It also covers more than 26 million people with health insurance through its Aetna arm.
Shares of the Woonsocket, Rhode Island, company slipped 2% to $56.99 in premarket trading.
The stock has already shed a quarter of their value this year while the Standard & Poor’s 500 index has climbed about 10%.