Magellan Health reports flat profit for quarter

Firm says it's on track to meet year's forecast

February 13, 2002|By M. William Salganik | M. William Salganik,SUN STAFF

Magellan Health Services Inc., the mental health insurer based in Columbia, reported essentially flat earnings and revenue yesterday for the quarter that ended Dec. 31, the first quarter of its fiscal year, and said it was on track to meet earnings projections for the year.

Magellan posted earnings from continuing operations of $8.7 million or 21 cents a diluted share. That compares to $13.9 million, or 35 cents a share, in the year-earlier quarter. Both quarters, however, included a number of one-time charges and payments. Including those, Magellan earned $11.2 million, or 27 cents a share, in the just-ended quarter, compared to $12.2 million, or 31 cents a share, in the year-earlier period.

Among the charges in the first quarter of this fiscal year is $4.5 million in restructuring costs. Company spokeswoman Erin Somers said that largely represented severance costs.

She said Magellan had laid off 247 people, about 4 percent of its total work force of 6,200. She said 52 of those layoffs were in Maryland, at headquarters and at a service center. Local employment is about 990.

The job cuts, she said, ranged from "very senior people down to the claims processor level." Magellan also eliminated 148 unfilled positions, she said.

Revenue for the quarter was $444.8 million, off slightly from the $445.9 million booked in the first quarter of the last fiscal year (but up slightly from $425.5 million excluding one-time items).

"We are pleased with our performance in the first quarter and believe our financial results provide an indication that our numerous strategic initiatives are yielding positive results for the company," said Daniel S. Messina, president and chief executive officer of Magellan.

Its shares closed at $6.32 yesterday, up 8 cents for the day.

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