WebMD Health Q3 Profit Rises; Backs FY09 Earnings View - Update

(RTTNews) - Tuesday, health information service provider WebMD Health Corp. (WBMD | Quote | Chart | News | PowerRating), reported a rise in profit for the third quarter, as revenues increased 15% from last year on higher advertising revenues. Earnings for the quarter came in ahead of Street estimates. Looking ahead, the company reiterated its earnings forecast for fiscal year 2009, as well as its fourth quarter.

The New York-based company's net income for the third quarter increased to $12.8 million or $0.21 per share from $10.8 million or $0.18 per share in the same quarter last year.

Earnings before interest, taxes, non-cash and other items, or EBITDA for the third quarter rose 30% to $33.1 million or $0.56 per share from $25.5 million or $0.43 per share in the prior year period.

Income from continuing operations for the quarter increased to $12.6 million or $0.21 per share from $10.0 million or $0.17 per share in the prior year quarter. Income from discontinued operations was $0.2 million, compared to $0.8 million in the prior year period

On average, seven analysts polled by Thomson Reuters expected the company to earn $0.19 per share for the quarter. Analysts' estimates typically exclude one-time charges and gains.

In the sequentially preceding quarter, WebMD Health reported net income of $2.1 million or $0.04 per share, down from $6.4 million or $0.11 per share in the year-earlier quarter. Net income from continuing operations, however, increased to $7.0 million or $0.12 per share from $5.7 million or $0.10 per share in the same quarter a year ago,

Revenue for the recent third quarter increased to $111.5 million from $96.8 million a year earlier. Street analysts' had a consensus revenue estimate of $111.08 million for the quarter.

For the preceding second quarter, WebMD reported revenues that increased 15% to $98.6 million from $86.0 million in the same quarter a year ago.

Public portal advertising and sponsorship revenue for the recent third quarter was $89.4 million for the third quarter, up 20% from $74.7 million in the prior year period. Traffic to the WebMD Health Network continued to grow strongly, reaching an average of 59.2 million unique users per month and total traffic of 1.4 billion page views during the quarter, increases of 19% and 27%, respectively, from a year ago. In the quarter, 1.6 million continuing medical education, or CME programs were completed on the WebMD Professional Network, an increase of 25% from last year.

Private portal services revenue for the quarter rose modestly to $22.2 million from $22.1 million in the prior year quarter.

WebMD launched its first consumer health portal outside the U.S. in October. WebMD partnered with UK-based pharmacy and health and beauty retailer Boots to launch a new health portal designed expressly for the health and wellness needs of the UK consumer

WebMD also said results for the third quarter do not reflect the recently completed merger with HLTH Corp., its former parent company, which was completed after the end of the quarter.

On October 23, the company completed the previously disclosed merger with Elmwood Park, New Jersey-based HLTH Corp. (HLTH | Quote | Chart | News | PowerRating), in an all stock deal, with WebMD being the surviving company.

Wayne Gattinella, President and Chief Executive Officer, WebMD said, "Our reported results mark another quarter of strong financial and operating performance. In the face of a generally challenging media environment, WebMD continues to expand its audience, revenue and operating margins. We are seeing strong momentum in our business and are excited about the opportunities for growth ahead of us."

For the nine-month period, net income was $17.7 million or $0.30 per share, compared to a loss of $6.2 million or $0.11 per share last year. Income from continuing operations for the period was $22.8 million or $0.39 per share, compared to loss from continuing operations of $7.3 million or $0.13 per share in the year ago period.

Revenue for nine months increased to $300.4 million from $263.4 million in the same period last year.

Looking ahead, WebMD said, "The Company reaffirmed its financial guidance for the fourth quarter and calendar year 2009 today and narrowed the ranges for its anticipated revenue and Adjusted EBITDA by raising the low end of those ranges."

WebMD expects fourth quarter earnings in the range of $0.13- $0.17 per share, and revenues within a range of $129.5 million - $139.5 million. Analysts currently expect the company to report earnings of $0.28 per share on revenues of 128.5 million for the quarter.

For the full-year 2009, the company still expects earnings from continuing operations in the range of $10.8 million - $13.5 million, or $0.22 per share to $0.27 per share. Revenues are anticipated to be $430.0 million - $440 million, an increase of 15% to 18% over 2008.

The Street is currently looking for revenues of $428.62 million for the full year.

In a seperate announcement, the company said it intends to commence a tender offer next week to purchase up to 5.70 million shares of its common stock at a price per share of $36.00. The last reported sales price per share of WebMD's common stock on the Nasdaq Global Select Market on November 3, 2009 was $34.26 per share. The number of shares proposed to be purchased in the tender offer represents around 10% of WebMD's currently outstanding common shares.

Following the merger of HLTH into WebMD, WebMD has nearly $1 billion in cash and investments, and will use a portion of its cash and investments to fund the tender offer

WBMD closed Tuesday's trading at $34.26, up $0.08 or 0.23%, on a volume of 0.42 million shares on the Nasdaq. In after hours, the stock further gained $0.17 or 0.50%, trading at $34.43. In the past 52 weeks, the stock trended in a broad range of $13.63 - $36.39, with a three-month average volume of 74,298.5 shares.

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