AVON, Conn._Health care outsourcing company Magellan Health Services Inc. said Friday its profit fell 15 percent in the second quarter as revenue from the public sector decreased.

Additionally, the company named a new president and authorized a share repurchase plan.

Magellan said it earned $18.5 million, or 53 cents per share, down from $21.6 million, or 54 cents per share. Its revenue fell 3 percent to $635.8 million from $656.9 million.

Analysts were expecting 53 cents per share and $622.3 million in revenue, according to a Thomson Reuters survey.

In morning trading, Magellan stock rose $1.36, or 4.3 percent, to $33.16.


The company bought back about 5.4 million shares of stock over the last year, which boosted its per-share profit.

Public sector revenue fell 5 percent to $343.2 million, commercial revenue decreased 2 percent to $160.2 million, and revenue from radiology benefits management decreased 7 percent to $70.6 million. Specialty drug management revenue rose 14 percent to $61.9 million.

The company said behavioral health care costs have increased for its Medicaid business because of great-than-expected use of outpatient care.

For the full year, Magellan backed its profit forecast of $2.04 to $2.59 per share. Analysts expect $2.22 per share.

The company said its board has approved a stock buyback worth up to $100 million over the next two years.

Magellan also said Karen Rohan will become its president effective Saturday. Rohan, 46, was previously in charge of Cigna Corp.'s group disability, dental and vision care business.