Cognizant Reaffirms 2015 Outlook, Updates On Health Net Relationship

(RTTNews) - Cognizant Technology Solutions Corp. (CTSH) reaffirmed its fiscal 2015 guidance and provided an update on the status of its relationship with Health Net Inc. (HNT).

For fiscal 2015, the company still expects Non-GAAP earnings per share to be at least $2.93, and revenue of at least $12.24 billion. Analysts polled by Thomson Reuters expected the company to report earnings of $2.97 per share and revenues of $12.33 billion for fiscal 2015. Analysts' estimates typically exclude special items.

Earlier today, Healthcare plan provider Centene Corp. (CNC) said it agreed to acquire managed health care company Health Net, Inc. in a cash and stock deal valued at about $6.8 billion, including assumed debt of about $500 million.

"Despite the anticipated loss of approximately $100 million in incremental revenues during the second half of 2015, we are pleased to reaffirm our guidance for the year due to continued strong demand and projected over-performance in other parts of our business. Today's announcement by Health Net will not impact our ability to achieve our goals for the year," said Karen McLoughlin, Chief Financial Officer, Cognizant.

Cognizant said, in an update on Health Net Relationship, that it remains a key strategic technology and operations partner to Health Net, with the existing relationship being extended through the end of 2020 with a total contract value of approximately $520 million. This will provide ongoing support of critical Health Net applications and processes.

Cognizant noted that the planned implementation of a seven-year master services agreement for end-to-end administrative services between Cognizant and Health Net, first announced in August 2014 and scheduled to begin in mid-2015, is being deferred while Health Net and Centene complete the merger review and approval process.

Cognizant expects that if the merger of Health Net and Centene is completed, the existing master services agreement will not be implemented as there will likely be overlaps in services and capabilities planned to be provided by Cognizant.

Cognizant said it has negotiated the right to license certain Health Net intellectual property for incorporation into its healthcare management solutions and as-a-service platforms.