Larry Merlo, who has served as CEO of CVS Health for a decade, is stepping down from the role in February.
CVS announced the news alongside its third-quarter earnings Friday morning. Karen Lynch, who is currently the president of the Aetna business segment, will take over as CEO effective Feb. 1.
Lynch will also join the company's board of directors upon assuming the CEO position. As part of the transition, Merlo will remain on the board until CVS' next shareholder meeting in May and will also serve as a strategic adviser until fully retiring on May 31.
"I am incredibly proud to have had the opportunity to lead CVS Health over the past decade as we pursue our important purpose to help people on their path to better health," Merlo said in a statement.
"Karen has been a key partner to me in our foundational work over the last two years, and her experience and vision will be critical in driving forward CVS Health's journey of enhancing value for our customers as the nation's leading health care company for years to come," he added.
Lynch was brought into the CVS fold following the healthcare giant's $69 billion acquisition of Aetna, one of the nation's largest health plans. The deal closed in November 2018.
David Dorman, chairman of CVS Health's board, said in a statement that the transition comes at the right time, and that Merlo was transparent early on about his plans to step down, which allowed the company to plan ahead to find a successor.
"Never before has our purpose been more critical than during these unprecedented times," Lynch said in a statement. "Together with the CVS Health leadership team and all of our colleagues, I will work to build on the strong foundation Larry has put in place to continue to make health care more accessible and affordable, driving better health outcomes for our consumers and communities. I am highly confident about our company's future and look forward to further accelerating the value we bring to all of our stakeholders."
CVS Health posts $1.2 billion in profit
CVS Health also released its third-quarter earnings data Friday, in which the company reported $1.2 billion in profit. That marks a slight decline from third-quarter profit in 2019 of $1.5 billion but beat Wall Street projections.
Through the first three quarters of the year, CVS' profits are substantially higher than in 2019, reaching $6.2 billion compared to $4.9 billion through September 2019.
CVS also reported $67 billion in revenue for the quarter, which again beat the Street. Revenues for the first three quarters of the year were $199.2 billion, up from $189.9 billion through the third quarter last year.
As a result of the performance, CVS raised its earnings per share guidance for the year to between $7.35 and $7.45 per share and also increased its projections for cash flow from operations to between $12.75 billion and $13.25 billion.
“Our strong third-quarter results demonstrate continued execution of our long-term strategic plan that is transforming the way health care is delivered," Merlo said in the release. "As an integrated health services provider, we’re developing holistic and innovative solutions that meet the needs of our customers in the community, in the home, or in the palm of their hand."
CVS also noted that it shed 316,000 members from Aetna plans, largely in the commercial segment, though some of those losses were offset by gains in Medicare and Medicaid. Through September 2020, Aetna boasts 23.3 million total members.