CVS Health said Friday that CEO Karen Lynch had resigned after the pharmacy chain warned again that its profits would fall short of Wall Street forecasts. Lynch will be replaced by CVS Caremark President David Joyner, who will try to steer the health care giant through a worsening environment of rising medical costs.

CVS, which cut its financial expectations for the third time in August, said Friday that its third-quarter earnings will fall short of expectations.

Shares fell $6.27, or 9.9%, to $57.40 in premarket trading, a decline that came after the stock had already lost 19% this year.

Earlier this month, CVS announced it planned to do so 2,900 workers cut to cut costs as the company grapples with cutbacks from inflation-weary consumers, cuts in shoppers’ spending on over-the-counter items and financial pressure from pharmacies.

Joyner, who will also join the company’s board of directors, most recently served as executive vice president of CVS Health and president of CVS Caremark. He led the pharmacy services business, which provides solutions to employers, health plans and government agencies and serves approximately 90 million members through Caremark, CVS Specialty and other divisions. Joyner has 37 years of experience in healthcare and pharmacy benefits management.

CVS Health also announced Friday that Chairman Roger Farah will now serve as executive chairman.

“We believe David and his deep understanding of our integrated business can help us more directly address the challenges facing our industry, accelerate the operational improvements needed for our business and leverage the value we uniquely create “We can take full advantage of it,” Farah said in a statement.

Loss of earnings

The Woonsocket, Rhode Island-based company’s preliminary guidance calls for third-quarter adjusted earnings of $1.05 to $1.10 per share, with higher-than-expected medical expense trends. Analysts polled by FactSet forecast earnings of $1.69 per share.

Back in August, CVS Health changed leadership of its health insurance business as the company continued to struggle with rising costs. At that time, the company named Lynch head of its insurance segment, replacing Executive Vice President Brian Kane, who left the company about a year after his arrival.

Rising claims from the company’s Medicare Advantage coverage have hurt CVS Health for much of this year and contributed to repeated cuts to its 2024 forecast. Medicare Advantage plans are privately run versions of the federal government’s insurance program, primarily for people age 65 and older.

CVS Health also said in August that the company was hurt by a decline in quality ratings for those plans and pressure from Medicaid insurance, which the company administers in several states.