Catamaran revenue miss, contract concerns weigh on shares
(Reuters) - Pharmacy benefit manager Catamaran Corp's CCT.TO CTRX.O first-quarter revenue miss and concerns about the renewal of a major contract sent its shares down as much as 11 percent.
Investors were looking for clarity on Catamaran's contract with Medicare provider HealthSpring, which was acquired by U.S. health insurer Cigna Corp (CI.N: Quote).
The contract, which brought in about a third of Catamaran's 2012 revenue of $9.94 billion, is up for renewal this year.
In a call with analysts, Chief Executive Mark Thierer said the company had "good business relationship" with Cigna but did not provide any details on the renewal of the contract.
"The markets were a little disappointed that there was no resolution around Cigna," said Paradigm Capital analyst Gabriel Leung.
Pharmacy benefit managers such as Catamaran Express Scripts Holding Co ESRX.O and CVS Caremark Corp (CVS.N: Quote) administer health plans and drug benefits for employers and run mail-order pharmacies.
The company's first-quarter revenue jumped 88 percent to $3.22 billion but still missed analysts' expectations due to lower-than-expected sales volumes and the exit of some of its health plan customers.
Analysts on average had estimated revenue of $3.51 billion.
"This is a high-multiple stock and sometimes small misses can have a material effect on the stock. We think its way overdone," said analyst Tom Liston of Cantor Fitzgerald. Continued...