Catamaran raises profit forecast after buying Catalyst

(Reuters) - Pharmacy benefit manager Catamaran Corp raised its earnings forecast for the year after completing its $4.4 billion acquisition of rival Catalyst Health Solutions, which will help it benefit from the new U.S. healthcare law.

Catamaran, formerly known as SXC Health Solutions, said third-quarter revenue more than doubled to $3.2 billion as it added new customers and integrated the existing customers of Catalyst and HealthTran LLC, a pharmacy benefit manager (PBM) it bought earlier this year.

PBMs help cut the cost of medicines by encouraging more use of generic drugs, and the sector is expected to gain from the new healthcare law's emphasis on reducing expenses for patients.

Catamaran raised its full-year adjusted profit forecast to between $1.09 and $1.13 per share, from its earlier range of $1.07 to $1.09 per share it had forecast earlier.

Analysts on average were expecting earnings of $1.09 per share, according to Thomson Reuters I/B/E/S.

Net income attributable to the company fell 19 percent to $20.5 million, or 10 cents per share, in the third quarter, from $25.3 million, or 20 cents per share, a year earlier.

Net income fell due to higher interest expenses, partly because of loans taken to finance the Catalyst deal, the company said.

On an adjusted basis, the company earned 25 cents per share, slightly above analysts' estimates of 24 cents.

Catamaran shares, which have risen 64 percent this year, closed at C$46.90 on Wednesday on the Toronto Stock Exchange.

(Reporting by Bhaswati Mukhopadhyay and Krishna N Das in Bangalore; Editing by Supriya Kurane)

Source: http://news.yahoo.com/catamaran-raises-profit-forecast-buying-catalyst-155425568--finance.html

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