The Scottsdale–based for-profit managed care company updated its guidance to expect net revenue in the range of $4.4 billion to $4.6 billion.
Magellan Health's net revenue fell 4.7% in Q2 2020, but the company's net income increased 552.9%, according to the company's latest earnings report released Wednesday morning.
The company's healthcare segment profit was $60.8 million, a year-over-year increase of $19.7 million that was largely the result of, "lower utilization trends in the specialty healthcare reporting unit due to COVID-19."
Additionally, Magellan's adjusted net income increased nearly 65% and its segment profit rose 6.4% to $57 million.
The Scottsdale–based for-profit managed care company updated its guidance to expect net revenue in the range of $4.4 billion to $4.6 billion, down from its previous guidance of net revenue between $7 billion to $7.4 billion.
"Throughout the COVID-19 pandemic, I continue to be inspired by the dedication and resilience of our organization. As we look to the balance of 2020, our strategic priorities remain intact," Kenneth Fasola, CEO of Magellan, said in a statement. "We are resolute in delivering on our existing commitments, lowering our operating cost structure, strengthening our capabilities through innovation, and improving our ability to capitalize on growth opportunities. The culmination of these efforts will strengthen our competitive position and lead to stronger growth in the future."
At the end of April, Magellan entered into a definitive agreement to sell Magellan Complete Care (MCC) to Molina Healthcare for $820 million, net tax benefits. The MCC deal is expected to close during Q1 2021.
During Q2, Magellan recorded an income tax benefit of nearly $39 million that was associated with, "deferred tax assets in connection with the pending divestiture of MCC to Molina."
For complete financial information, review Magellan's filing with the Securities and Exchange Commission.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.
Photo credit: KIEV, UKRAINE - Jan 3, 2019: Magellan Health Managed care company logo seen displayed on smart phone - Image / Editorial credit: IgorGolovniov / Shutterstock.com