2 Min Read
TORONTO (Reuters) - Shares in Catamaran Corp CCT.TO jumped 12 percent after the pharmacy benefits manager reported a sharp jump in profit and revenue and said future prospects were promising as customers navigate the complexity of the new U.S. healthcare environment.
The company said revenue was up 53 percent at $4.9 billion in the first quarter, helped by the addition of new customers, the inclusion of results from its Restat acquisition and growth in business from Cigna Corp (CI.N), which is migrating its customers onto Catamaran's claims processing system.
Catamaran, formed from the merger of SXC Health Solutions and PBM Catalyst Health Solutions, helps administrators of group health care plans reduce their prescription drug costs.
Executives at Catamaran told analysts on a conference call following the report they are evaluating other merger opportunities as the "best way to deploy capital on behalf of our shareholders" and expect more deals this year.
Catamaran said its net income attributable to the company was $63.4 million, or 31 cents a share, compared to $51.4 million, or 25 cents, a year earlier.
On an adjusted basis Catamaran earned 50 cents a share.
Analysts had on average expected the company to earn 44 cents a share on revenue of $4.6 billion, according to Thomson Reuters I/B/E/S.
The company raised the lower end of its forecast range for the year, and now expects adjusted earnings per share of between $2.10 and $2.22.
The "beat and raise validates our view that there are no holes in this craft's hull," Jefferies analyst Brian Tanquilut wrote in a note.
By mid-morning, the company's stock was trading over C$5 higher on the Toronto Stock Exchange, at C$46.66.
Reporting by Alastair Sharp; Editing by James Dalgleish