WebMD Third-Quarter Losses Greater Than Predicted
Amid restructuring efforts and a pending change of location, WebMD Corp. reported a "wider-than-expected third-quarter loss" yesterday, the
Atlanta Journal-Constitution reports. Excluding "restructuring and non-cash charges," the online health service company lost $65.8 million in the quarter, or 27 cents a share. In 1999's third quarter, WebMD reported a $10.1 million loss, or 14 cents a share. Wall Street had expected the company to lose 22 cents a share. Revenue increased to $151.2 million compared to $28.7 million a year ago, but "including charges," the company's net loss totaled $786.9 million, or $3.17 a share, compared with $17.1 million, or 24 cents a share, a year ago. Last month, WebMD underwent an "
executive shake-up," with CEO Jeffrey Arnold and several other top executives resigning. The company also announced it would move its headquarters from Atlanta to the New York area, a decision its board approved yesterday (Miller, Atlanta Journal-Constitution, 11/14). According to the Wall Street Journal, WebMD's greater-than-expected losses were due to a "$44.9 million restructuring charge for layoffs and office closings" and a decline in the value of the company's investments in "Internet-related companies." Executives yesterday, however, "emphasized that the quarterly results don't show the beneficial effect" of the company's current
restructuring plan, which includes laying off 1,100 workers and is designed to save $260 million a year. WebMD CEO Martin Wygod said he expects the company's financial situation to improve beginning next quarter and to turn a profit by the end of next year (Carrns, Wall Street Journal, 11/14).