LISLE, Ill. (AP) -- Catamaran Corp.'s third quarter earnings sank 19 percent, as costs tied to its acquisition of Catalyst Health Solutions countered revenue gains for the pharmacy benefits manager.
The Lisle, Ill., company also said Thursday that it was raising its earnings forecast for the year.
Company shares climbed 6.1 percent, or $2.86, to $50.02 in morning trading as the broader market rallied.
Catamaran, which changed its name last summer from SXC Health Solutions, earned $20.5 million, or 10 cents per share, in the three months that ended Sept. 30. That compares to earnings of $25.3 million, or a split-adjusted 20 cents per share, in last year's quarter. Catamaran did a two-for-one stock split last month that increased its shares outstanding in this year's quarter.
Adjusted earnings, which exclude some acquisition-related expenses, were 25 cents per share.
Revenue more than doubled to $3.19 billion in the quarter.
Analysts expected, on average, earnings of 24 cents per share on $3.24 billion in revenue, according to FactSet.
SXC Health bought Catalyst, a fellow pharmacy benefits manager or PBM, earlier this year in a cash-stock deal worth more than $4 billion. The company announced the name change to Catamaran in July.
PBMs run prescription drug plans for employers, government agencies and other clients, using their large purchasing power to negotiate lower drug prices. They make money by reducing costs for health plan sponsors and members. Catamaran also provides health care information technology services.
Catamaran said Thursday its PBM revenue more than doubled to $3.2 billion in the third quarter, largely due to the addition of Catalyst, and its information technology revenue climbed 29 percent to $40 million.
The company's selling, general and administrative expense, as well as other costs, also soared due to the acquisition.
Catamaran now expects full-year adjusted earnings of $1.09 to $1.13 per share, up from its previous estimate for $1.07 to $1.09 per share. Its annual revenue outlook of $9.9 billion to $10 billion remains unchanged.
Analysts expect earnings of $1.09 per share on $10.04 billion in revenue.
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