The board of insurer Tampa-based WellCare Health Plans Inc. has fired CEO Alec Cunningham, replacing him temporarily with its recently appointed chairman, David J. Gallitano, while it searches for a permanent successor.
Gallitano said a statement Friday that the board “felt that as the company continues to expand and grow, it was necessary to identify a new experienced leader to help write the next chapter for WellCare.”
The Medicare and Medicaid coverage provider reported the move while also announcing that its third-quarter earnings had jumped 67 percent compared to last year, when high costs in Kentucky and an $18 million premium hit in Georgia hurt results.
The results beat Wall Street expectations.
WellCare shares sank 5.5 percent, or $3.65, to $63.03 in morning trading.
A company spokeswoman said in an email that Cunningham left WellCare on Thursday.
The company said it is conducting a national search for a new CEO. Gallitano became chairman May 22 and has been on the company board since 2009, when Cunningham became CEO.
Citi analyst Carl McDonald said in a research note the board must have been fairly unhappy “since this kind of change creates a significant distraction, particularly for the senior executives hired by Cunningham.”
For the quarter, WellCare earned $64 million, or $1.45 per share. That compares to earnings of $38.3 million, or 87 cents per share, last year. Its adjusted earnings for the latest quarter came to $1.56 per share. Analysts surveyed by FactSet expected $1.51 per share.
Revenue was $2.5 billion. Analysts expected $2.38 billion in revenue.
WellCare runs Medicaid coverage in several states. That state and federally funded program provides coverage for poor and disabled people. The company also sells Medicare prescription drug coverage and Medicare Advantage plans, which are privately run versions of the government’s Medicare program.