WebMD posts healthier results
By Debra McGarry, CBS.MarketWatch.com
Last Update: 5:30 PM ET Mar 23, 2001
ATLANTA (CBS.MW) - WebMD saw its shares climb 6 percent Friday after the Internet-based health-care portal posted better-than-expected fourth quarter-results and reached a deal with Microsoft.
WebMD Corp., formerly Healtheon/WebMD Inc., recorded a fourth-quarter loss of $51.8 million, or 14 cents a share, narrower than the year-ago loss of $47.5 million, or 40 cents a share and the Wall Street estimate of a loss of 16 cents a share.
The loss excludes restructuring, integration, non-cash expenses and a one-time charge of $408 million in the quarter.
Following the news, the stock gained 38 cents to $6.19, but it remains well below its 52-week high of $36.63 reached last March.
Atlanta- based WebMD also reiterated is goal of reaching cash profitability by the end of 2001.
In December, WebMD (HLTH: news, msgs, alerts) canceled a pharmaceutical content and services deal with DuPont as part of WebMD's restructuring efforts, which were initiated at the end of the third quarter.
WebMD also revamped its agreement with News Corp. in the fourth quarter to further reduce the company's loss expected in the March quarter and to keep WebMD along the road to profitability.
Quarterly sales soared, year-to-year, to $199 million from $33.2 million in the year-earlier quarter, about 5 percent above most analysts' forecasts.
WebMD said it revised a pact with Microsoft (MSFT: news, msgs, alerts) , which will enable WebMD to be the primary provider of health information on MSN and other related Microsoft sites. In exchange, Microsoft will provide technology and funding for WebMD's new hand-held computer system for doctors.
USB Warburg lowered WebMD's 2001 revenue estimates to $740 million from $834 million, but raised the per-share estimate to a loss of 22 cents from a loss of 28 cents for the same period.
The investment firm said it's "enthusiastic about WebMD's prospects for profitability for 2002," citing future blockbuster deals and the company's lower projected cash burn rate.
WebMD had $710.5 million in cash as of Dec. 31.
Analyst John Souter at SG Cowen boosted the stock's rating to "strong buy" from "buy" on the company's refocused strategic partnerships, including the potential deal with AOL.
As the leading consumer health site, the tide may be turning, according to Souter, in terms of industry participants willing to work with WebMD who not long ago shunned the company.
Debra McGarry is a reporter for CBS.MarketWatch.com in San Francisco. |
