Health Solutions posts quarterly earnings rise
Shares of Lisle-based SXC Health Solutions Corp. dropped more than 8 percent Thursday despite the company's beating analysts' earnings estimates for the fourth quarter on rising pharmacy benefit management revenues.
SXC reported a 20 percent gain in net income in the quarter ended Dec. 31 to $3.8 million, or 18 cents per diluted share, compared with $3.3 million, or 15 cents per diluted share, in the year-earlier period.
Analysts had predicted the pharmacy benefits management and health-care information technology company would report earnings of 13 cents per share.
Shares of SXC continued a decline Thursday that began a week ago on news the company agreed to buy New York-based claims processor National Medical Health Card Systems Inc. for $143 million in cash and stock.
The stock ended the day at $12.04, down $1.07, or 8 percent, from Wednesday's close, and putting the shares near their 52-week low of $11.35 reached last November.
Revenue in the fourth quarter was $23.6 million, a 7 percent increase over the $22 million in revenue recorded in the year-earlier period. The company attributed the growth to a 15 percent increase in volume of its pharmacy benefit management transactions, to 106.1 million in the fourth quarter from 92.4 million in the year-earlier period.
"These are exciting times for the company," Chairman and CEO Gordon S. Glenn said. "We believe we have the industry's broadest product and service suite as well as the flexibility to provide those services."
For the full year 2007, SXC reported a 2.2 percent decrease in net income to $13.2 million, or 61 cents per diluted share, from $13.5 million, or 69 cents per diluted share, in the prior year. Analysts had expected full year earnings of 56 cents. SXC attributed the earnings decrease to a $2.3 million spike in income taxes and an $8.4 million increase in expenses.
For 2008, the company predicted earnings per diluted share will be between 58 cents and 64 cents. SXC expects consolidated revenue of $97 million to $103 million. Eight analysts on average predict full year 2008 net income of 64 cents per share on revenue of $101.2 million.