Magellan Health (MGLN) Tops Q3 EPS by 18c, Revenues Beat; Offers FY20 EPS/Revenue Guidance

Magellan Health (NASDAQ: MGLN) reported Q3 EPS of $0.08, $0.18 better than the analyst estimate of ($0.10). Revenue for the quarter came in at $1.17 billion versus the consensus estimate of $1.14 billion.

Third Quarter 2020 and Recent Highlights:

• Net revenue from continuing operations was $1.170 billion for the third quarter of 2020, an increase of 1.0% compared to the third quarter of 2019 primarily due to growth in the Pharmacy Management segment, partially offset by a decline in the Healthcare segment.
• Net loss from continuing operations was $17.3 million for the third quarter of 2020 compared to net income of $4.1 for the third quarter of 2019, due primarily to non-cash special charges as the Company reduces its real estate footprint.
• The Company is re-affirming its 2020 continuing operations guidance ranges for revenue, segment profit, adjusted net income and adjusted earnings per share, and updating its guidance ranges for GAAP net income and earnings per share to reflect higher year-to-date and anticipated fourth quarter special charges.
• On September 3, 2020, the Company appointed David Bourdon as chief financial officer.
• On September 9, 2020, the Company announced a strategic relationship with Livongo, whereby Livongo’s digital self-care solutions are being added to Magellan Health’s product suite. The Company and Livongo have also agreed to collaborate on new product innovations for behavioral health.
• On October 27, 2020, the Company completed a strategic investment in Kaden Health, a technology-enabled healthcare company with a proprietary telemedicine platform for virtual behavioral care.
• On October 27, 2020, the Company’s Board of Directors authorized an extension of its $400 million stock repurchase program through November 15, 2021. As of September 30, 2020, the remaining capacity under the repurchase program was $186 million.

“I am encouraged by the significant progress we continue to make in our journey to re-imagine Magellan Health, and I am pleased we remain on track to deliver on our commitments for 2020. Our success is, in no small part, based on the efforts of our dedicated Magellan associates who have responded to the needs of our members and clients during the pandemic,” said Kenneth Fasola, chief executive officer, Magellan Health.

“As a leading independent payer services company, we offer disruptive, comprehensive and integrated complex care services and insights. Magellan is committed to remaining a key partner in lowering total healthcare costs, while driving higher quality care for members. We are developing new solutions to build on years of insight and experience that will enable payers to manage high cost areas through integrated physical and mental healthcare. Our new relationships with Livongo and Kaden demonstrate we are executing on our strategy to innovate our solutions so that we can accelerate growth in the future,” continued Fasola.

GUIDANCE:

Magellan Health sees FY2020 EPS of $0.63-$1.10, versus the consensus of $0.91. Magellan Health sees FY2020 revenue of $4.4-4.6 billion, versus the consensus of $4.5 billion.

For earnings history and earnings-related data on Magellan Health (MGLN) click here.

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