Magellan Health Services Inc. beat Wall Street analysts' expectations on earnings, but missed on revenue for the final quarter of 2012.
The company's earnings, reported Thursday, leapt nearly 26 percent compared to the same quarter a year earlier, $37 million to $1.32 a share. The analysts had expected flat earnings.
In the last quarter of 2011, Magellan earned $29.7 million, or $1.05 per diluted share
The next two to three years will lead to industry consolidation during the implementation of the Affordable Care Act, the company's CEO Barry M. Smith said in a statement.
"We foresee market disruption for the traditional players, allowing significant growth opportunities for innovative, agile companies such as Magellan," Smith said.
Quarterly revenue for the company was up 15.1 percent to $830.3 million compared with $721.5 million during the same period in 2011.
The Avon-based specialty insurer specializes in managing behavioral and mental health services, radiology and specialty pharmaceuticals.
Revenue grew in all segments except Medicaid administration, which declined 22 percent to $41.4 million from $52.8 million. Commercial health plans grew by 41 percent to $193.1 million from $136.7 million. Revenue from public-sector programs, such as the military contracts, grew by 7.8 percent to $414.6 million from $384.8 million.
Radiology-benefits revenue grew 11 percent to $95.3 million from $85.9 million. Specialty-pharmaceutical-benefits revenue grew 4 percent to $14.5 million from $13.9 million.
"We are gaining traction on our Medicaid initiatives where we have created new models of care for special populations that integrate the pharmaceutical, physical and behavioral health management of individuals with serious mental illness," Smith said.
Magellan also reported 2012 yearly earnings Thursday. The company had $151 million in net income for the year, or $5.42 per diluted share, up 16.5 percent from $129.6 million in 2011.
Magellan's stock closed at $51.56, up .72 percent at close of market Thursday.Copyright © 2014, The Baltimore Sun