Healtheon/WebMD loss widens

Healtheon/WebMD (Nasdaq: HLTH) said Tuesday its first-quarter loss was 49 cents a share, a penny wider than First Call's expected loss of 48 cents a share. The company also reported strong revenue growth, and said it could turn a profit by the fourth quarter of 2001.

Shares in the online healthcare network closed at 19 3/4 , well below their 52-week high of 126 3/16. The stock has declined despite positive talk from the company's star board members Jim Clark and John Doerr, who said in April they were buying back up to $220 million in the company's stock.

Healtheon/WebMD predicted that its 2001 revenues should exceed $1 billion, as growth due to increased transactions and the integration of its latest purchases. The company said it could achieve positive earnings before non-cash charges as early as the fourth quarter of 2001. It also said it "does not endorse published comments by one of the company's directors at a recent conference suggesting that these milestones could be achieved significantly earlier than previously suggested by numerous published analysts' models."

First quarter revenue of $65.9 million was up 275 percent over revenue of $17.6 million reported in the year ago quarter, and up 98 percent over fourth quarter revenue.

The operating loss before non-cash charges, primarily depreciation and amortization, (EBITDA) for the quarter was $85.9 million, or 49 cents a share, and $73 million, or 42 cents a share, including interest income. That compared with a loss of $11.8 million, or a loss of 19 cents per share, in the year-ago quarter.

Financial results include the merger of Healtheon with WebMD and the acquisitions of MedE America and Medcast. The acquisition of Kinetra and a deal with News Corp. were completed in late January, and are accounted for as purchases and included in the financial results since the acquisition dates.

The company said growth reflects an increase in advertising and e-commerce revenue, growth in subscription revenues and the integration of Kinetra. Healtheon's cash position also remains strong at more than $1 billion.

Healtheon/WebMD's also announced agreement to acquire Envoy, the largest processor of healthcare electronic data interchange (EDI) transactions in the U.S. during their quarter, and inked partnerships with healthcare companies including Mead Johnson, medibuy.com, HealthStream, Medtronic and Kiva Genetics.

Healtheon/WebMD competes with Shared Medical Systems (NYSE: SMS), which German industrial and technology group Siemens AG announced plans to purchase Monday in a deal valued at about $2.1 billion.