Health care outsourcing company Magellan Health Services Inc. said Friday that its first-quarter profit rose 35 percent as lower costs offset a decline in revenue. It also boosted its outlook for the year.
Magellan said its net income rose to $34.3 million, or $1.02 per share, for the three months ended March 31, from $25.5 million, or 73 cents per share, in the year-ago period. Revenue fell 5 percent to $692.8 million from $728.1 million.
Meanwhile, operating expenses fell 7 percent to $635.4 million, mainly on lower care costs.
Analysts polled by FactSet expected earnings of 78 cents per share and revenue of $717 million.
Meanwhile, the company said its segment profit rose 23.3 percent to $75.7 million. Segment profit excludes stock compensation costs, interest expenses, taxes and other charges.
Looking ahead, the company boosted its outlook for 2011. It now expects profit between $3.24 and $3.76 per share, up from prior guidance of $2.93 to $3.43 per share. Analysts expect earnings of $3.39 per share.