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Magellan Health Second Quarter Profit Falls 21 Percent

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AVON, Conn. (AP) _ Magellan Health Services Inc.’s
second-quarter earnings fell 21 percent as the cost of care and
other expenses countered revenue gains for the health care
management company.

The Avon, Conn., company said Friday it earned $26.9 million, or
97 cents per share, in the three months that ended June 30. That
compares with earnings of $34.2 million, or $1.07 per share, in
last year’s quarter.

Revenue climbed 15 percent to $805.5 million.

The earnings beat analyst expectations. Analysts surveyed by
FactSet expected, on average, earnings of 91 cents per share on
$824.9 million in revenue.

Magellan manages behavioral health, radiology, specialty
pharmaceutical and public sector pharmacy benefits programs. It
works for health plans, employers and government agencies.

The company’s cost of care climbed 18 percent to $521.8 million,
and the cost of goods sold jumped 55 percent to $82.8 million.

Magellan also said Friday it was reaffirming its 2012 guidance,
which calls for earnings to range between $3.25 and $3.89 per share
on revenue of between $3.2 billion and $3.4 billion.

Analysts expect, on average, earnings of $3.74 per share on
$3.29 billion in revenue.

Company shares climbed 90 cents, or 1.6 percent, to $55.14 at
the start of trading Friday.

(Copyright 2012 by The Associated Press.  All Rights Reserved.)

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