Lynch, who is president of CVS’ Aetna division, helped steer the $69 billion merger between healthcare retailer CVS and health insurance giant Aetna in 2018. She succeeds long-time CVS CEO Larry Merlo, who is retiring. Merlo will continue to serve on CVS’ board of directors until May 2021.
Lynch will assume the CEO post on Feb. 1. She will also serve on the company’s board.
“This leadership transition comes at the right time for CVS Health. This month marks the two-year anniversary as one company, with our foundation clearly established and significant positive momentum across the company,” said CVS Chairman David Dorman in a statement on Friday (Nov. 6).
“As Larry has been transparent with us about his overall plans, we were able to put a thorough, multi-year process in place to consider and evaluate internal and external candidates. That process led to the selection of Karen Lynch. Larry’s collaboration with Karen in the coming months will ensure an effective leadership transition,” Dorman added.
The announcement comes as CVS reported higher-than-expected third-quarter earnings, helped in part by pandemic-related sales of products and services.
The healthcare conglomerate reported adjusted earnings of $1.66 a diluted share, compared with $1.84 a diluted share for the same period in 2019. Revenue climbed to $67.1 billion, up from $64.8 billion for the same quarter last year.
Analysts were expecting adjusted earnings of $1.33 a share, on revenue of $67.1 billion, according to Bloomberg.
CVS also raised its 2020 financial outlook. The company now expects adjusted earnings per share in the range of $7.35 to $7.45, up from previous guidance of $7.14 to $7.27.
CVS Health has been working hard to transform the retail side of its business into one-stop shopping for healthcare products and services.
“Our strong third-quarter results demonstrate continued execution of our long-term strategic plan that is transforming the way healthcare is delivered,” said Merlo in a statement on Friday.
“Our comprehensive pandemic response shows the power of a diverse and agile enterprise,” he continued. “We’ve opened more than 4,000 COVID-19 test sites across the country since March, and have administered over six million tests. We’re helping businesses and universities safely reopen and we were recently selected to administer COVID-19 vaccinations in long-term care facilities. We’ll continue to play a vital role in our nation’s recovery thanks to the tireless efforts of our nearly 300,000 employees.”
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