Avon’s Magellan Health Services said it expects higher revenue but lower profits in the year ahead.
The health care program manager anticipated net revenue of between $3.61 billion and $3.80 billion. That compares to expected 2013 net revenue, announced in October, of between $3.5 billion and $3.7 billion.
But Magellan expects lower earnings in the year to come. Compared to net income of $118 million to $136 million this year, it expects to book between $57 million and $73 million next year.
That translates to diluted earnings per share of $2 to $2.56, down from this year’s $4.28 to $4.93.
CFO Jonathan Rubin said during a call with analysts Tuesday morning that the impact of a lost contract in Arizona as well as margin pressures are two reasons for the lower expectation.
Also on the call, CEO Barry M. Smith, who becomes executive chairman on Jan. 1, called 2014 a transitional year for Magellan.
