Magellan Health Services Inc reported a better-than-expected 85 per cent rise in its quarterly profit on strong Medicaid administration revenue.

Net profit of the company remained at $43.7 million during the fourth quarter of 2009 from $23.6 million for the same period in the previous financial year. For the full year 2009 its net profit rose to $106.7 million as compared to $86.2 million for the year-ago period.

Revenue jumped nearly nine per cent to $718.9 million during the fourth quarter over the corresponding period of the previous fiscal. The company posted annual revenue of $2.64 billion in 2009 compared to $2.63 billion for the fiscal year 2008.

During the fiscal year 2009, the company acquired First Health Services, a unit of insurer Coventry Health Care Inc. As per the company, the acquisition strengthened the Medicaid administration revenue of the company by $38.4 million.

Expansion into new areas underscores the firm's focus on diversification, and has certainly generated some positive momentum for it.

For fiscal year 2010, the company expects earnings in the range of $2.73 to $3.29 per share and revenue between $3 billion and $3.2 billion.