Magellan Health Q2 Profit Falls; Backs 2014 Adj. EPS View - Quick Facts

(RTTNews) - Magellan Health Inc. (MGLN) reported that its second-quarter net income attributable to the company fell to $4.99 million or $0.18 per share, from $31.48 million or $1.15 per share in the same quarter last year.

Adjusted earnings per share were $0.39 down from $1.15 in the prior year quarter. Analysts polled by Thomson Reuters expected the company to report earnings of $0.57 per share for the quarter. Analysts' estimates typically exclude special items.

Adjusted Earnings per Share decreased mainly due to decreased segment profit, and a higher effective tax rate as a result of non-deductibility of the Health Insurer Fee and valuation allowances for certain deferred tax assets.

Total net revenues for the quarter rose to $888.01 million from $842.75 million in the prior year quarter. Wall Street expected revenues of $863.06 million. Revenue increased due to the inclusion of Partners Rx and CDMI in the current year quarter, new business and rate increases, partially offset by the loss of revenues associated with terminated contracts.

The company also announced a new five-year $500 million credit facility, including a $250 million term loan, and a $250 million revolver and letter of credit facility.

The company reaffirmed its 2014 guidance ranges for full-year net income of $53 million to $69 million, segment profit of $238 million to $258 million, and cash flow from operations of $204 million to $226 million, excluding the net shift of restricted funds between cash and investments.

The company updated its guidance for earnings per share to a range of $1.90 to $2.47 per share, based on updated fully diluted shares 27.9 million. This updated share amount reflects share repurchases and option exercises through the close of business on July 21, 2014, but excludes any potential activity that may occur during the remainder of the year.

The company also reaffirmed its 2014 guidance range for full-year adjusted net income of $74.5 million to $92.5 million, which results in adjusted earnings per share of $2.67 to $3.32. Wall Street currently is looking for fiscal year 2014 earnings of $2.40 per share.