Healtheon loss larger than expected
Online health care company Healtheon reports a loss for its second quarter following a string of acquisitions and mergers that it hopes will build its health-care portal service.
Healtheon, which links doctors, insurers, and patients through the Internet, reported a net loss of 25 cents per share for the second quarter ending June 30, compared to a net loss of 47 cents per share in the same period one year ago. Analysts expected the company to report a loss of 22 cents per share, according to Zacks financial service.
The operating loss before depreciation shrunk to $13.3 million in the second quarter of 1999 from $13.9 million in the first quarter.
Revenue for the quarter increased 108 percent to $22.7 million, compared to revenue of $10.9 million for the three months ended June 30, 1998. The sequential growth in revenue was 29% compared to the three months ended March 31.
For the first half of the year, the company reported revenue of $40.3 million compared to revenue of $20.7 million for the six months ended June 30, 1998, an increase of 95 percent. The net loss per share was 55 cents for the six-month period in 1999 as compared to a net loss per share of $1.27 for the same period in 1998.
"In the second quarter, we have continued our rapid revenue growth and expansion of new customer opportunities," said Mike Long, chief executive officer of Healtheon.
In one of the year's most successful IPOs, investors in February snapped up Healtheon's initial offering of 5 million shares, sending the stock up 292 percent to $31.38 on its first day of trading.
The stock vaulted to $126 in May after it agreed to acquire the online medical resource WebMD in a $7.9 billion deal, among the biggest Internet mergers to date, designed to create the largest online health service.
But Healtheon shares have steadily eroded and analysts have warned of a slump.
During the June quarter, Healtheon announced three mergers that enhanced its strategy of securing institutional sponsors to drive growth in its "e-health" transaction volumes and foster physician and consumer use of its Internet portals.
On April 21, Healtheon announced a definitive agreement to acquire MedE America, a provider of healthcare transaction solutions for pharmacies, hospitals, physicians, dentists, payers and pharmacy benefits managers.
And on June 30, Healtheon agreed to acquire Greenberg News Networks, known as Medcast, a leading Internet-based medical news and information service provider, with proprietary daily medical news, information and education services.
Healtheon collects fees from a variety of online transactions, including when doctors and dentists use its service to process claims, make specialist referrals, order lab tests or contact pharmacies.