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Magellan (MGLN) Q3 Earnings Decline Y/Y on Elevated Costs

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Magellan Health, Inc. delivered third-quarter 2021 adjusted earnings per share of 3 cents per share, which declined 62.5% year over year due to escalating expenses.

The company’s revenues of $1.3 billion climbed 7.2% year over year in the quarter under review on the back of net new business growth in the Healthcare segment. However, the upside was partly offset due to the non-renewal of Magellan Rx’s Individual Part D Prescription Drug Plan (PDP) on Jan 1, 2021 resulting in a slight decline in the company’s Pharmacy Management segment.

Segment profit improved 11.4% year over year to $38 million in the third quarter.

Magellan Health, Inc. Price, Consensus and EPS Surprise

Magellan Health, Inc. Price, Consensus and EPS Surprise

Magellan Health, Inc. price-consensus-eps-surprise-chart | Magellan Health, Inc. Quote

Healthcare segment profit of $20.6 million dipped 3% from the prior-year quarter’s figure. The segment’s performance was hurt due to elevated corporate investments, partly offset by favorable net business growth.

Pharmacy Management segment profit amounted to $29 million, which declined 7.8% year over year in the quarter under review. The downside was due to higher corporate investments and new contract implementation expenses, partly offset by strength in specialty and government businesses.

Total costs, expenses and other income of $1.3 billion increased 5.3% year over year due to rise in cost of care, and direct service costs and other operating expenses.

Capital Position (as of Sep 30, 2021)

Magellan Health exited the third quarter with cash and cash equivalents of $1 billion, which declined 9.3% from the figure at 2020 end.

Total assets dipped 0.2% from the figure as of Dec 31, 2020 to $3.4 billion.

Total stockholder's equity amounted to $1.9 billion, which increased 3.4% from the 2020-end level.

During the nine months ended Sep 30, 2021, net cash used in operating activities was $60.1 million compared with $54.2 million in the prior-year comparable period.

Business Update

Declared on Jan 4, 2021, the merger agreement of Magellan Health with Centene Corporation (CNC - Free Report) is anticipated to conclude in the fourth quarter of 2021.

Zacks Rank

Magellan Health carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Medical Sector Releases

Of the medical sector players that have reported third-quarter results so far, HCA Healthcare, Inc. (HCA - Free Report) and Tenet Healthcare Corporation (THC - Free Report) beat the Zacks Consensus Estimate for earnings.


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