Magellan says sale to Aetna will up 2005 profit

Magellan Health Services, Farmington, Conn., said it will record a net gain of $45 million from its sale to Aetna of the behavioral health centers and access to provider networks used by Magellan in managing behavioral health benefits for Aetna members. Aetna, Hartford, Conn., is creating an in-house behavioral health benefits management arm. For 2005 overall, Magellan said it expects to earn net income of between $105 million and $118 million, or $2.90 per share to $3.26 per share. It projects 2005 revenue of between $1.81 billion and $1.83 billion. Magellan, which will report its fourth-quarter and 2004 results in March 2005, reported net income of $373.3 million, or $1.87 per share, on revenue of $1.4 billion through the first nine months of 2004. The company said it has more than 6,500 behavioral health facilities. -- by Joseph Mantone