Managed care insurer reports improved third-quarter profit

Earnings per share beat expectations by 2 cents

November 12, 1999|By Sean Somerville | Sean Somerville,SUN STAFF

Mid Atlantic Medical Services Inc., the Rockville-based managed care insurer, posted third-quarter profit of $7.12 million, or 17 cents per share -- a vast improvement over the comparable period last year and 2 cents higher than analysts' earnings per share expectations.

In the third quarter of 1998, the company reported a loss of $6.74 million, or 15 cents per share -- a loss attributed to the settlement of an audit by the U.S. Office of Personnel Management. Without that one-time event, MAMSI would have had net income of $3.98 million, or 9 cents a share. This year's results represented a 79 percent increase over those numbers.

"These results show that our new management team is delivering solid, reliable results," said Dr. Mark D. Groban, who was named MAMSI's chairman in April after George T. Jochum resigned.

MAMSI posted second-quarter earnings of $4.5 million, or 11 cents per share, an increase of 25.7 percent from the second quarter of last year.

Revenue for the three months that ended Sept. 30 was $335.3 million, an 11.9 percent increase over the $299.5 million in the comparable period of 1998. Medical and home health patient expenses rose to $286.3 million, from $255.4 million. Administrative expenses were $37.4 million, higher than $33.3 million for the comparable period last year.

Medical expenses were $124.38 per member per month, up from $120.21 in the comparable period a year earlier.

The company said its provider network had more than 38,000 doctors, 336 hospitals and 20,425 pharmacies. Membership in MAMSI's health plans reached 1,843,000.

Groban attributed the third-quarter results to improvements in product pricing, partnerships and administrative cost controls. "We expect to maintain this momentum," he said. "We are well-positioned for a strong year."

Shares of MAMSI closed yesterday at $7.125, down 43.75 cents.

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