* Expects full-year adjusted profit of $1.81-$1.88/share
* Sees 2013 revenue of $14.2 bln-$14.6 bln
* Fourth-qtr profit $42.5 mln vs $26.7 mln last year
* PBM revenue more than doubles to $3.3 bln
* Shares fall 7 pct in Toronto
Feb 28 Pharmacy benefit manager Catamaran Corp
reported a 59 percent jump in fourth-quarter
profit, but the company's forecast for the year and the lack of
clarity on its deal pipeline dampened investor sentiment.
Shares of Catamaran, formerly named SXC Health Solutions,
fell as much as 7 percent to C$52.81 on Thursday on the Toronto
Stock Exchange. The stock has gained 20 percent since the
beginning of the year, outperforming the benchmark S&P/TSX
"If you look at how the stock was trading prior to the
release of the results, I think the market might have been
expecting a little bit more in terms of the guidance," analyst
Gabriel Leung of Paradigm Capital said.
Leung said Catamaran's forecast factored in deals they have
already signed, so the company could increase its outlook over
the course of the year if it signs additional deals.
Chief Executive Mark Thierer said on a conference call that
the company's pipeline was robust.
"The deals we're seeing now are bigger, there are more of
them, and they're coming sooner than in the past."
The company raised its forecast last year following its $4.4
billion acquisition of rival Catalyst Health Solutions and
announced a three-year contract with U.S. discount retailer
Target Corp starting April 1, 2013.
Leung added that some people had hoped to get some tangible
contract announcements in conjunction with the results, which
did not happen.
The company, which had a market value of C$11.48 billion as
of Wednesday's close, competes with pharmacy benefit managers
(PBM) Express Scripts Holding Co and CVS Caremark Corp
Catamaran is growing fast and stealing some market share,
but is quite a distance from the top two PBMs, analyst Tom
Liston of Cantor Fitzgerald said.
PBMs administer health plans and drug benefits for employers
and run mail-order pharmacies. They help cut costs of medication
by encouraging more use of generic drugs.
The year stands to be a busy one for the healthcare sector
as the United States prepares for 30 million people to join the
ranks of insured patients under the Affordable Care Act, or
"Obamacare," starting 2014.
There are also some concerns about Catamaran's contract with
Health insurer Cigna Corp.
Cigna had acquired Medicare provider HealthSpring, which was
an important customer for Catamaran. That contract is up for
renewal this year.
There are concerns whether Cigna will renew that contract as
it has an in-house PBM, Leung said, adding that there may
possibly be a resolution sometime in the first half of this
Analysts did, however, say that it was a low margin contract
REVENUE FORECAST LAGS ESTIMATES
The company said on Thursday it expects to earn $1.81 to
$1.88 per share on an adjusted basis. It forecast 2013 revenue
of $14.2 billion to $14.6 billion.
Analysts on average expected earnings of $1.83 per share, on
revenue of $15.05 billion, according to Thomson Reuters I/B/E/S.
Net income attributable to the company in the fourth quarter
rose to $42.5 million, or 21 cents per share, from $26.7
million, or 21 cents per share, a year earlier.
Catamaran, which grew through its acquisitions of HealthTran
LLC and Catalyst, executed a two-for-one stock split on Oct. 1,
On an adjusted basis, the company earned 39 cents per share.
PBM revenue rose 144 percent to $3.3 billion in the quarter.