Magellan Health Services Backs 2013 Outlook; Guides 2014 - Quick Facts

(RTTNews) - Magellan Health Services (MGLN) announced that it expects net income for 2014 to be in the range of $57 million to $73 million, which translates into earnings per share in the range of $2.00 to $2.56, inclusive of share repurchases to date and the effect of the Affordable Care Act or ACA tax. Net revenue is expected to be in the range of $3.61 billion to $3.80 billion for 2014. Analysts polled by Thomson Reuters expect the company to report earnings of $3.27 per share and revenues of $3.41 billion for fiscal 2014.

The company also anticipates segment profit, which represents income before income taxes, excluding stock compensation expense, depreciation and amortization, interest expense, interest income, gain on the sale of assets, and special charges or benefits, for 2014 to be in the range of $215 million to $235 million. Cash flow from operations is expected to be in the range of $181 million to $203 million.

With regard to the company's share repurchase program, since the inception of this program, Magellan Health said it has repurchased approximately $112.5 million of the $300 million authorized by the Board of Directors. As of December 16, 2013, there are approximately 27.5 million shares outstanding.

With respect to 2013, the company confirmed its guidance, which was most recently updated in October. The company said in October that it expected 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 for fiscal 2013. Street currently is looking for fiscal year 2013 earnings of $4.70 per share on annual revenues of $3.48 billion.

"The next year will be a transitional year for us. By the end of 2014, we anticipate a more stable customer base from which we can achieve earnings growth in future years, with significant contributions from our Magellan Complete Care and Magellan Pharmacy Solutions businesses. Beyond 2014, we are optimistic about our future, targeting a long-term compound annual growth rate in both revenue and earnings per share of 20 percent," said Jon Rubin, chief financial officer of Magellan Health Services.