WebMD Corp. (Nasdaq: HLTH) was down 3/4 at 9 3/8 early Tuesday after the online health company missed analysts’ estimates for the third quarter.
Revenue for the quarter rose to US$151.2 million from $28.7 million a year earlier, the Atlanta, Georgia-based company said. The loss before charges totaled $44.9 million, or 27 cents per share, compared with a loss of $10.1 million, or 14 cents, and the net loss totaled $786.9 million, or $3.17 per share, compared with $17.1 million, or 24 cents.
Analysts had expected a loss of 22 cents per share before charges.
The latest quarter’s bottom line included a $44.9 million restructuring charge to cover job cuts created by a string of acquisitions. The company expects the restructuring to save about $260 million each year, as it eliminates 1,100 jobs and consolidates offices. The restructuring is scheduled to be completed by the fourth quarter of next year.
The net loss for the quarter also includes a $39.6 million non-cash charge for “various past investments made in Internet-related businesses,” reflecting the decline in value of those investments, WebMD said.
Chief executive officer Martin J. Wygod said the results were complicated by the September closing of the acquisitions of Medical Manager, CareInsite and OnHealth. The numbers, Wygod said, “do not demonstrate the benefits of the comprehensive restructuring program underway nor the impact of the new management’s strategic initiatives to ensure the company’s leadership role in bringing the benefits of improved health care connectivity to our country.”
Wygod also said the company is in “significant discussions” with its partners as part of a plan to reevaluate its current products and strategic relationships. “It is inevitable that some of these revenue streams will be reduced in our efforts to redefine these relationships,” he noted.
The company said it expects “additional restructuring and integration charges” related to the reevaluation, as well as the relocation of its corporate offices to New York.
President Marv Rich said the company is looking at this year and next as a “building period,” and expects to end 2001 with positive earnings before income taxes, depreciation and amortization.