(RTTNews) - Tuesday, health information services provider WebMD Health Corp.
(WBMD), revealed first quarter financial results, reporting a turn to loss on impairment charges even as revenues for the quarter grew 14%. WebMD incurred a $27.4 million impairment charge for the quarter related to a reduction to fair value of its auction rate securities investments. The company also backed its previously announced full year earnings outlook.
The New York based company reported a first quarter net loss of $23.3 million or $0.40 per share, compared to a net income of $0.7 million or $0.01 per share in the year ago quarter.
Loss from continuing operations was $23.3 million or $0.40 per share, compared to $0.7 million or $0.01 per share in the year ago quarter. Excluding impairment charges, income from continuing operations and net income for the quarter was $4.1 million or $0.07 per share, up from $0.7 million or $0.01 per share in the prior year period.
On average, ten analysts polled by First Call/Thomson Financial expected earnings of $0.05 per share for the quarter.
At March 31, 2008, WebMD held auction rate securities - ARS with a face amount of $168.4 million, which failed all auction thus far. WebMD indicated limited liquidity until a successful auction or such time as other markets for the investments develop, however was uncertain when other markets would develop. WebMD determined that the fair value of the ARS as of March 31, 2008 was $141 million and recorded an impairment charge of $27.4 million related to a reduction in fair value of its auction rate securities investments for the quarter ended March 31, 2008.
Adjusted EBITDA improved 25% to $15.8 million or $0.27 per share from $12.6 million or $0.21 per share in the prior year quarter.
Revenue for the quarter grew 14% to $81.7 million from $71.9 million in the corresponding quarter a year ago. Ten analysts on consensus had a revenue estimate of $81.69 million for the quarter.
Online Services segment revenue was $78.4 million, up 15% from $68.4 million in the prior year quarter. Advertising and sponsorship revenue improved 18% to $56.1 million, while Private portal licensing revenue grew 9% to $21.9 million.
Publishing and Other Services segment revenue was $3.3 million, down 7% from $3.5 million in the earlier year quarter.
Wayne Gattinella, President and CEO, WebMD said, 'We believe that the long-term value of our franchise will continue to increase as we expand our distribution footprint and deliver the full spectrum of online health solutions that the marketplace is steadily evolving towards.'
Traffic to the WebMD Health Network grew 25% with average number of unique users of 51.9 million per month, while total traffic improved 24% to 1.2 billion page views in the first quarter. Excluding the prior year period's traffic from AOL, no more a part of the WebMD Health Network, average monthly unique users of WebMD Health Network grew 29% and page view traffic increased 27%.
During the quarter, about 1.1 million continuing medical education or CME programs were completed on the WebMD Professional Network, an increase of 64% from the prior year period.
At March 31, 2008, WebMD had approximately $160 million in cash and cash equivalents.
In February, HLTH and WebMD entered into a definitive merger agreement by which HLTH would be merged into WebMD, with each outstanding share of HLTH common stock to be converted into 0.1979 shares of WebMD common stock and $6.89 in cash.
Peer Performance
Amongst peers, the Atlanta, Georgia based
A.D.A.M., Inc.
(ADAM) in March 2008 reported fourth quarter net income that jumped 375% to $1.8 million or $0.17 per share from $0.4 million or $0.04 per share in the prior year quarter. Revenues for the quarter improved 12% to $7.6 million from $6.3 million in the year ago quarter.
Outlook
Looking ahead, WebMD reaffirmed its 2008 net income outlook, excluding impairment charges related to ARS investment, in the range of $29.5 million - $37.5 million or $0.48 - $0.60 per share. Analysts currently anticipate earnings of $0.60 per share, with estimates ranging from $0.49 - $0.71 per share for the year.
Net income continues to be in the range of $2.1 million - $10.1 million or $0.03 - $0.16 per share for the fiscal year.
The company continues to project full year revenues in the range of $380 million - $395 million. Street analysts currently expect revenues of $386.68 million for the year.
Stock Movement
WBMD closed Tuesday's regular trading at $31.74, down $1.81 or 5.39%, on a volume of 213,933 shares on the Nasdaq. In the past 52-week period, the stock traded in the range of $21.86 - $63.49, with a three-month average volume of 266,324 shares.
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