Magellan Health 4Q profit climbs 24 percent

AVON, Conn. (AP) — Magellan Health Services Inc., which helps health plans, employers and government agencies manage health benefits, said Thursday that its fourth-quarter earnings climbed 24 percent, helped by gains in managed care and dispensing revenue.

The Avon, Conn., company reported net income of $37 million, or $1.32 per share, in the three months that ended Dec. 31. That compares with earnings of $29.7 million, or $1.05 per share, in the final quarter of 2011.

Revenue grew 15 percent to $830.3 million from $721.5 million a year ago.

Analysts expected, on average, earnings of $1.05 per share on $827.5 million in revenue, according to FactSet.

Magellan also saw direct service costs and other operating expenses climb more than 6 percent to $145 million in the quarter.

The company's revenue missed analyst Matthew Borsch's forecast of $857 million. But the Goldman Sachs analyst said in a research note Magellan's improved profitability more than offset that, and the company appeared to benefit from a continuing trend of weak medical costs.

For the full year, Magellan earned $151 million, or $5.42 per share, up from $129.6 million, or $1.05 per share, a year ago. Revenue rose to $3.21 billion in revenue from $2.8 billion a year earlier.

For 2013, the company expects earnings of $3.27 to $3.92 per share on $3.56 billion to $3.74 billion in revenue. The earnings forecast includes share repurchases through Feb. 22 but doesn't factor in future buybacks.

Analysts expect, on average, earnings of $3.88 per share on $3.63 billion in revenue.

Its shares rose $1.03, or 2 percent, to $52.22 in morning trading. Its shares traded as high as $56.58 in late July and as low as $40.24 in early June.