Catamaran (UNKNOWN:CTRX.DL) 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.

David Williamson has no position in any stocks mentioned. Michael Douglass has no position in any stocks mentioned. The Motley Fool recommends Catamaran. The Motley Fool owns shares of Catamaran. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.