MDF Q307 is out. EPS $0.03, Revenue $69.6M, Cash $34.4M.
Overall I'm pleased to the result (EPS is $0.05 without the one time charges). I'm encouraged by the 1,100 addition of HMO (6000 HMO members now) though they have to spend $500K more on the HMO marketing in Q3.
PSN performance (segment profit before cost ) continue to improve which is good.
Not too be overly critical but the HMO losses need to start coming down in 2008. HMO MER need to start coming down. I don't expect it to break even but its losses must come down and show that there is chance for it to actually be profitable in the next 2-3 years.
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Segment Profit/Loss Q3 and Nine months 2007:
For the company’s HMO the segment loss before allocated overhead and income taxes was $3.1 million as compared to a loss of $2.0 million for the third quarter of 2006
For the HMO, the segment loss before allocated overhead and income taxes was $8.7 million, compared to a loss of $6.2 million for the same period in 2006.
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I'm a bit confused on what is included in MER (if the HMO MER is less than 100%, I wonder why the segment is posting huge losses before the allocated overhead. my current guess is that they only include direct medical expense in the MER and not including Marketing cost and operation cost).
Having said all that (being critical on their HMO losses), overall, I'm pleased to see MDF Q3 result.
Hoping fora mild winter (for Q407 and Q108) and a nice open enrollment season (in the next couple monts)
Stan
