Magellan Health 2Q profit falls 21 percent

AVON, Conn. (AP) — Magellan Health Services Inc.'s second-quarter earnings fell 21 percent as the cost of care and other expenses countered revenue gains for the health care management company.

The Avon, Conn., company said Friday it earned $26.9 million, or 97 cents per share, in the three months that ended June 30. That compares with earnings of $34.2 million, or $1.07 per share, in last year's quarter.

Revenue climbed 15 percent to $805.5 million.

The earnings beat analyst expectations. Analysts surveyed by FactSet expected, on average, earnings of 91 cents per share on $824.9 million in revenue.

Magellan manages behavioral health, radiology, specialty pharmaceutical and public sector pharmacy benefits programs. It works for health plans, employers and government agencies.

The company's cost of care climbed 18 percent to $521.8 million, and the cost of goods sold jumped 55 percent to $82.8 million.

Magellan also said Friday it was reaffirming its 2012 guidance, which calls for earnings to range between $3.25 and $3.89 per share on revenue of between $3.2 billion and $3.4 billion.

Analysts expect, on average, earnings of $3.74 per share on $3.29 billion in revenue.

Company shares climbed 90 cents, or 1.6 percent, to $55.14 at the start of trading Friday.

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