[This story has been corrected. See details at bottom]
Avon specialty health care manager Magellan Health Services said it’s expecting higher profits for 2013 due to its third quarter results, expected impacts of its acquisition of Partners Rx and the recent extension of an Arizona contract.
Magellan, which today reported increased third-quarter revenue but lower profits compared to the same three months last year, said it now expects net income between $118 million and $136 million for the fiscal year ending Dec. 31.
That’s up from its previous guidance of between $90 million and $108 million.
For the quarter ended Sept. 30, Magellan grew its revenue by 9.4 percent, while profits dipped 29 percent on increased costs and expenses.
During the quarter, Magellan received a Florida Medicaid contract for patients with serious mental illness, inked an investment in newly licensed New York health plan AlphaCare.
The Partners deal closed Oct. 1, the first day of the fourth quarter. CFO Jon Rubin said in an earnings call that Partners’ fourth-quarter profits are expected to be relatively modest. The company expects Partners to add 20 cents per diluted share to earnings in 2014.
Correction: The original version of this article incorrectly described how Magellan’s 2013 profit guidance changed. The company is raising its outlook, not lowering it. The story and headline have been altered to reflect that. Other factors that led to the guidance increase have also been added.
