AVON, Conn. -- Magellan Health Services Inc., which helps health plans, employers and government agencies manage health benefits, said Friday that its net income more than doubled in the third quarter on a large one-time tax benefit.
Magellan said a one-time reversal of money set aside for tax contingencies added $34.6 million to its net income during the quarter. The company also raised its annual guidance, primarily because the reversal reduced its tax rate.
Magellan said its net income rose to $66.3 million, or $2.36 per share, from $31.4 million, or $1.03 per share. The tax reversal added $1.24 per share to the company's profit. Revenue rose 16 percent to $798.4 million from $686.8 million.
Analysts had forecast net income of 99 cents per share and $833.7 million in revenue on average, according to FactSet.
For the full year, Magellan now expects to earn $4.83 to $5.55 per share, up from $3.25 to $3.89 per share. Analysts were forecasting $3.71 per share.
Magellan said it expects new business to help drive solid growth in 2013, countering contract terminations, increased investments in its pharmacy and Medicaid businesses, and continued pressure on profit margins due to economic strains on health plan and state clients.
Magellan Health stock added $2.51, or 5.2 percent, to $50.58 in morning trading.