"Sluggish" best describes Teva Pharmaceuticals (NYSE:TEVA) these days with one exception: how quickly its CEO hit the road.

The Israel-based drugmaker reported its third-quarter earnings on Thursday, but the big news came one day earlier. Dr. Jeremy Levin, Teva's CEO for the past 18 months, abruptly left. Here's the scoop on the company's third-quarter performance and late October surprise.

Teva announced revenue of $5.1 billion in the last quarter. That's a 2% increase year-over-year -- not exciting by any means but at least it's moving slowly in the right direction. Sales in the U.S and Europe actually grew at twice that rate, but an 8% decline in sales throughout the rest of the world served as a drag on overall results.

Earnings moved in the wrong direction. Teva reported non-GAAP earnings of $1.1 billion, or $1.27 per share, reflecting a drop of 4% in net income and 1% on a per-share basis compared to the third quarter of 2012. While lower than last year, Teva did narrowly beat the average analysts' estimate of $1.26.  

GAAP earning looked better, with third-quarter net income of $706 million, or $0.84 per share. That's an improvement from the same period in 2012, when Teva reported a loss of $84 million, or $0.09 per share. However, those prior-year figures were skewed heavily by over $1.13 billion in one-time costs related to legal settlements, restructuring, and other items.

Quick move
While the financial results were sluggish, now former-CEO Jeremy Levin wasn't. Teva announced on Wednesday that Levin had left the company. Levin and Teva chairman Phillip Frost, a billionaire who is the company's largest shareholder, had a sharp disagreement on how to handle major layoffs in Israel. Frost's version of the dispute was that the differences were "over nuances rather than disagreement about the strategy itself." 

The hiring of Levin in January 2012 was widely viewed as a good move. He championed the "string of pearls" strategy at Bristol-Myers Squibb (NYSE:BMY) resulting in the big drugmaker making 17 acquisitions to build up its product lineup. Levin also led Bristol to license some of its non-core compounds to companies seeking to develop drugs for emerging markets. Any hopes that he could repeat the Bristol magic at Teva went up in flames after this week's events.

Eyal Desheh has now assumed the role of interim CEO at Teva. Desheh previously served as the company's CFO. Teva announced that the hunt for a permanent successor is now under way.

Looking ahead
Sudden changes at the top don't usually inspire a warm-and-fuzzy feeling among investors. Just look at VIVUS (NASDAQ:VVUS). The biotech announced its third CEO in just two months in early September. The stock is down nearly 30% since then. Teva's challenges are different than those of VIVUS, so their outcomes could be quite different. But after Teva's revelation of Levin's departure, shares dropped 8% -- not exactly warm and fuzzy.

The main problem is that these executive changes convey uncertainty. That's a big issue for Teva even without musical chairs at the top. More than 20% of its revenue comes from multiple sclerosis drug Copaxone. Teva lost a court challenge in July when several patents for the drug were invalidated. Unless the company's appeal is successful, Copaxone loses patent exclusivity in May 2014.

Momenta Pharmaceuticals (NASDAQ:MNTA) is poised to jump into the market. Immediately after the U.S. court decision on Copaxone, Momenta announced plans to launch a generic version of the drug as quickly as possible in 2014.

With what could be a tough road ahead in attracting a top-caliber CEO and rivals like Momenta smelling blood in the water, Teva's immediate outlook doesn't look very bright. The company could get past all of these woes -- but don't expect that to happen quickly. Remember, the operative word for Teva is "sluggish."

Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool recommends Momenta Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.