Magellan posts earnings of 23 a share

August 04, 1999|By M. William Salganik | M. William Salganik,SUN STAFF

Columbia-based Magellan Health Services Inc. reported third-quarter earnings yesterday of $7.5 million, exclusive of one-time items -- equivalent to 23 cents a share, in line with analysts' estimates. In the corresponding quarter of 1998, Magellan earned $6.9 million, or 22 cents a share, exclusive of one-time charges.

Magellan also netted more than $14 million from the sale of European mental hospitals during the three months that ended June 30. Including that and a one-time restructuring charge of $313,000, earnings were $21.5 million, or 68 cents a share. In the year-earlier quarter, including one-time items, Magellan earned $7.4 million, or 24 cents a share.

"Taking out all that noise [of one-time items], the results were solid -- flat to slightly up, but nothing major either way," said Premila Peters, an analyst with KDP Investment Advisors of Montpelier, Vt.

Revenue in the quarter was $486.7 million, up 4.9 percent from $463.9 million in the 1998 quarter.

Most of Magellan's revenue and profit continued to come from its behavioral health unit. The unit had revenue of $370 million in the quarter, up 11 percent from $332.3 million in the year-earlier period.

The unit acts as a mental health insurer, collecting premiums from HMOs, employers and government agencies, and providing psychological and psychiatric care for people who need it. It grew from Maryland-based Green Spring Health Services, as Magellan, Green Spring's parent, acquired other managed behavioral health firms.

"The margins have improved through efficient consolidation of the acquired companies," said Dr. Henry T. Harbin, president and chief executive officer. The unit now provides coverage for 65 million people.

Magellan, which had been based in Atlanta, announced earlier this year that it was moving its headquarters to Columbia.

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