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Catamaran Up 13%: Here's Why

Catamaran (NASDAQ: CTRX  ) shareholders had a great day, with shares up 13% after the pharmacy benefits manager (PBM) reported stellar first quarter earnings that beat on both the top and bottom lines. Revenue spiked 53% year over year to $4.9 billion, while adjusted EPS climbed 16% to $0.50 per share. The company continues to see significant lift from the 10-year contract it signed last year with Cigna to provide prescription drug benefits for the insurer's members.

That higher volume came at the price of some margin pressure, with gross margin declining to 6%. SG&A expenses climbed 30% to $131 million due to the acquisition of Restat, another PBM, for $410 million last year.

Management also reaffirmed revenue guidance of $20 billion to $21 billion and increased adjusted EPS guidnace to $2.10 to $2.22. All in all, great news across the board for the PBM. In the video below, Motley Fool health care analysts David Williamson and Michael Douglass discuss the other major takeaways from the quarter and what investors should watch for next.

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Michael Douglass

As the Motley Fool's Health Care Editor/Analyst, I focus on all things health care -- although my greatest interest is in the megatrends reshaping the American health care system, including the Affordable Care Act, Accountable Care Organizations, a shifting regulatory landscape, and the new drug discoveries fundamentally changing disease management and treatment.

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12/31/1969 7:00 PM
CTRX $0.00 Down +0.00 +0.00%
Catamaran CAPS Rating: *****