Magellan Health Services Q3 Profit Declines, But Lifts Full-year Outlook

(RTTNews) - Magellan Health Services Inc. (MGLN) reported that its third-quarter net income was $47.23 million or $1.70 per share, down from $66.38 million or $2.36 per share in the same quarter last year. On average, analysts polled by Thomson Reuters expected the company to report earnings of $1.01 per share for the quarter. Analysts' estimates typically exclude special items.

However, net revenue for the quarter rose 9 percent to $873.60 million from $798.44 million in the prior-year quarter. Analysts had a consensus revenue estimate of $875.27 million for the quarter.

For fiscal 2013, Magellan Health Services now forecasts earnings per share in a range of $4.28 to $4.93 on net revenue in a range of $3.5 billion to $3.7 billion. While announcing its first-quarter results, the company had forecast fiscal 2013 earnings per share in a range of $3.27 to $3.93 and net revenue in a range of $3.3 billion to $3.5 billion.

The company cited the the expected fourth quarter impact of its Partners Rx acquisition, and the extension of its Maricopa County, AZ contract through March 31, 2014 as reasons for the revised full-year outlook. The revised earnings outlook also takes into account the impact of share repurchase activity through October 21, 2013.

Analysts expect the company to report earnings of $4.04 per share for the year on revenues of $3.36 billion.

Jonathan Rubin, chief financial officer, said, "Looking ahead, after adjusting the current 2013 segment profit guidance range for $15 million of net favorable, out-of-period adjustments, we currently expect that we will have moderately lower segment profit in 2014. We will provide detailed 2014 guidance during our December call."