Despite a 5.4 percent uptick in revenue in its second quarter, Magellan Health Inc.'s net income fell 159 percent, the Avon healthcare company reported.
Magellan booked $5 million in profits, down from $31.5 million in the prior-year quarter. That amounted to 8 cents per diluted share, down from $1.15.
But the increase wasn't enough to offset the company's higher costs, which grew $87.7 million, to $877.4 million.
CEO Jonathan Rubin said in a statement that behavioral health costs and investment in Magellan Complete Care were higher than expected.
"We have plans in place to address the cost of care issues over the balance of the year," Rubin said.
Magellan reaffirmed its guidance for the full year, saying it still expects net income between $53 million and $69 million. It also updated its diluted earnings per share guidance to a range of $1.90 to $2.47.