Magellan Health reported financial results for the second quarter of 2015.
In a release on July 27, the Company noted net revenue of $1,157.6 million, segment profit of $53.2 million, and net income of $4.6 million, or $0.17 per diluted share. In addition, the company reported adjusted net income of $14.7 million and adjusted earnings per share of $0.56.
Variances for three months ended June 30, vs. June 30, 2014:
-The increase in revenue between periods resulted primarily from the inclusion of revenues from acquired entities, the impact of new business, and same store growth and rate increases, which were partially offset by the loss of revenues associated with previously announced contract terminations.
-The increase in segment profit between periods is primarily due to new business, same store growth, and the impact of acquisitions, which were partially offset by previously announced contract terminations.
-The increase in adjusted net income between periods is mainly due to increased segment profit.
-The decrease in net income between periods is primarily due to higher non-cash expenses relating to acquisitions, partially offset by higher segment profit.
As of June 30, the company had unrestricted cash and investments of $270.6 million.
"Our results for this quarter reflect strong performance from our Pharmacy segment, solid results in Specialty Solutions, and some weakness in care results in the Commercial and Public Sector segments. We have plans in place to address these issues, and expect that the results will improve in the second half of the year," said Barry M. Smith, chairman and chief executive officer of Magellan Health.
"The recent reorganization of the company into two business units - Magellan Healthcare and Magellan Rx Management - provides a unified approach to customers for our entire suite of healthcare products. This improved alignment will help drive enhanced services and solutions, as well as administrative efficiencies. This enables us to better align our resources across the enterprise in support of our health plan, employer and government clients."
Results and Outlook
"Relative to full year 2015, we are maintaining our guidance, with the exception of updating our EPS guidance to reflect the impact of recent share repurchase activity. We now expect fully diluted EPS to be between $1.69 and $2.28, and fully diluted adjusted EPS between $3.45 and $3.90, based on average fully diluted shares of 26.7 million. This updated fully diluted share count reflects share repurchases and option exercises through July 22, but excludes any potential future activity.
"Compared to the first half of 2015, we expect the second half of the year to produce stronger earnings due to improved results in Magellan Complete Care, mainly driven by care management initiatives, network recontracting, and rates; the impact of business growth, primarily in our Pharmacy Management segment; and the seasonality and timing of care results and customer settlements across our businesses. We expect an increasing pattern of earnings over each of the last two quarters of the year."
Magellan Health is a company focusing on managing the fastest growing, most complex areas of health, including special populations, complete pharmacy benefits and other specialty areas of healthcare.
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