Magellan (MGLN) Q2 Earnings Decline Y/Y on High Expenses

Table of Contents Magellan Health, Inc. Price, Consensus and EPS SurpriseCapital PositionBusiness UpdateZacks RankOther Medical…

Magellan Health, Inc. MGLN reported second-quarter 2021 adjusted earnings per share of 11 cents per share, which plunged 86.9% year over year due to elevated expenses.

Shares of the company had remained almost unchanged on Aug 6.

Revenues at Magellan Health improved 11% year over year to $1.2 billion in the quarter under review. The improvement can be attributed to contributions by the Healthcare segment. However, the upside was partly offset by a slight decline across the company’s Pharmacy Management unit resulting from its January exit of Medicare Part D as a plan sponsor in 2021.

Magellan Health, Inc. Price, Consensus and EPS Surprise

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

Segment profit of $32.3 million tumbled 43.3% year over year.

Healthcare segment profit amounted to $29.6 million, which declined 51.4% year over year. The downside was due to recovery of utilization patterns to pre-pandemic levels and higher corporate investments.

Pharmacy Management segment profit of $13.2 million remained unchanged from the prior-year quarter’s figure. The segment benefited from strength across specialty and government businesses, partly offset by rise in corporate investments.

Total costs, expenses and other income increased 12.8% year over year to $1.2 billion primarily due to higher cost of care, and direct service costs and other operating expenses.

Capital Position

Magellan Health exited the second quarter with cash and cash equivalents of $678.5 million, which slumped 40.7% from the 2020-end level.

As of Jun 30, 2021, the company’s total assets of $3.2 billion fell 4.2% from the figure at 2020 end.

Total stockholder’s equity totaled $1.9 billion, which increased 2.9% from the figure as of Dec 31, 2020.

During the six months ended Jun 30, 2021, net cash used in operating activities of $142.7 million compared unfavorably with $7.4 million of the metric in the prior-year comparable period.

Business Update

The merger agreement of Magellan Health with Centene, which was announced on Jan 4, 2021, is anticipated to conclude in the second half 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 second-quarter results so far, Tenet Healthcare Corporation THC, Humana Inc. HUM and Universal Health Services, Inc. UHS beat the Zacks Consensus Estimate for earnings.

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Universal Health Services, Inc. (UHS): Free Stock Analysis Report

Humana Inc. (HUM): Free Stock Analysis Report

Tenet Healthcare Corporation (THC): Free Stock Analysis Report

Magellan Health, Inc. (MGLN): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.