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Healtheon 4Q loss widens, revenue jumps

Healtheon/WebMD Corp. (Nasdaq: HLTH) said Friday losses widened in its fourth quarter. Revenue surged as the company continued to integrate a slew of acquisitions.

Shares in the Internet healthcare giant closed at 58 1/2 Thursday. The stock has climbed over past months, as the company has continued its spending spree. Its most recent purchase was competitor OnHealth Network Company (Nasdaq: ONHN). Just before that, it snapped up Medical Manager Corp. (Nasdaq: MMGR), a provider of physician practice management systems, along with its publicly traded subsidiary, CareInsite, Inc. (Nasdaq: CARI).

The fourth and 1999 results included the company's merger with WebMD and the acquisitions of Mede America and Medcast from the date of closing, which was in the middle of the fourth quarter. Both were accounted for as purchase transactions.

The operating loss before non-cash charges, primarily depreciation and amortization, EBITDA, for the quarter was $49.3 million, or 42 cents a share, compared to a loss of $13.1 million, or 25 cents a share, for the fourth quarter of 1998. The company reported a net loss per share of $1.98 for the quarter, compared to a net loss per share of 34 cents a share for the same period last year.

First Call consensus expected a loss of 55 cents a share.

Revenue for the fourth quarter grew by 113 percent to $33.2 million compared to revenue of $15.6 million for the year ago quarter.

Now that the three major components of its business are in place -- the WebMD Health consumer portal, the WebMD Practice physician portal and institutional connectivity, the company said it is benefiting from a diversified revenue model encompassing e-commerce, transactions, subscriptions and advertising.

On a pro-forma combined basis, revenue was about $47 million for the quarter and EBITDA was a loss of about $75.0 million, excluding the company's purchase Kinetra and a transaction with News Corp. in January. Including those transactions, pro-forma combined revenue for the fourth quarter was around $55 million.

Healtheon also reported year-end results. For the year ended December 31 revenue was $102.1 million, an up 109 percent over the $48.8 million reported for 1998. EBITDA for the year was a loss of $82.8 million, or $1.03 a share, compared to a loss of $37.9 million or $1.08 per share for 1998. Net loss per share was $3.58 for 1999, compared to 1998's the year compared to a net loss of $1.54 for 1998.

As a result of the three purchase transactions completed in 1999, the company recorded intangible assets of $3.6 billion and amortization expense of these intangibles of $169 million, the company said in its statement.