Healtheon Corp. (Nasdaq: HLTH) posted second quarter net loss of 25 cents a share, or $17.6 million Thursday, just below First Calls estimated loss of 22 cents a share.
Shares, however, jumped 2 1/16 to 32 1/8 in early trading.
Revenue for the three months ended June 30 increased 108 percent to $22.7 million, compared to revenue of $10.9 million for the same period a year ago. Sequentially, sales were up 29 percent.
Shares the online heath care company closed Wednesday at 30 1/6.
Negative earnings below expectations could prove the latest problem for Healtheon shareholders, who have watched the stock fall from a high of 126 3/16 in May. Shares dropped more than 21 percent on August 10 as Healtheon's lock-up period ended. When the lock-up period ends, insiders get their first chance to take profits since the initial public offering.
Investors gobbled up shares in one of the year's most successful IPOs, sending 5 million shares up 292 percent to $31.38 on their first day of trade.
The stock vaulted to $126 in May after it agreed to buy the online medical resource WebMD in a $7.9 billion deal, one of the biggest Internet mergers to date, designed to create the largest online health service. But Healtheon shares have been steadily eaten away, and analysts warned a slump would occur when the shares became free to trade.
This quarter's net loss compares to a 47 cents a share, or $12.7 million lost in the same quarter 1998. The operating loss before depreciation and amortization (EBITDA) declined to $13.3 million in the second quarter of 1999 from $13.9 million in the first quarter.
During the June quarter, Healtheon announced three mergers predicted to spur growth in institutional sponsors, e-health transactions, and physician and consumer use.
Plans were announced to buy MedE America (Nasdaq: MEDE), a network of approximately 650 payers, 20,000 physicians, 1,100 hospitals, 42,000 pharmacies, 10,000 dentists and 200 affiliate partners. healthcare institutions.
WebMD, an online healthcare information and services company, will also merge with Healtheon, giving it the first end-to-end Internet healthcare and e-commerce company in a new company called Healtheon/WebMD. Microsoft, Intel, Excite, Covad, Softbank, Superior Consultant and Dell Computers have made substantial investments in WebMD and Healtheon/WebMD.
Healtheon/WebMD also agreed June 30 to acquire Greenberg News Networks, also known as Medcast, an Internet-based medical news and information service provider, with proprietary daily medical news, information and education services.
Healtheon/WebMD has garnered exclusive relationships with online health channels of MSN, MSNBC, WebTV, Lycos and Excite and important relationships with Yahoo! and Readers' Digest. Since March, Healtheon has also announced new customer relationships with Unilab Corporation and CIGNA, the third largest commercial healthcare benefits provider in the United States, among others. Another driver of page views is WebMD's deal with CNN, which includes online content links and co-branded editorial content on CNN's television networks.
Numbers show Healtheon is set to continue its growth spurt. Transaction numbers increased in the second quarter by 16 percent. Healtheon/WebMD has also increased its physicians from 94,000 at Dec. 31, 1998, to a projected 200,000 following the companies' merger. Page views increased 160 percent from 2.9 million page views in April to 7.5 million in June.
Other health related sites elbowing for attention on the net include the recently public Drkoop.com Inc. (Nasdaq: KOOP). Adam.com (Nasdaq: ADAM), an educational software company that added the .com May 5 has also enjoyed surging stocks as investors went on an Internet health-kick this spring.
Reuters contributed to this report.