With Increased Q1 Losses, WebMD Announces Deal with AOL
Although WebMD Corp.'s first quarter net loss widened, the company beat Wall Street expectations for the first quarter by narrowing its operating loss, the Wall Street Journal reports. The firm, in the midst of a restructuring plan, reported a net loss of $1.04 billion, or $2.91 a share, in this year's first quarter. In the quarter one year earlier, WebMD reported a net loss of $431.5 million. The company's quarterly loss this year was $32.7 million, excluding noncash charges of more than $1 billion, compared to a loss one year ago of $73 million. The company's revenue ($184.5 million) was more than double that ($65.9 million) of one year ago, the Journal reports. During the first quarter of this year, the company spent $208.7 million on its restructuring efforts, which included moving its corporate headquarters from Atlanta to Elmwood Park, N.J. (Carrns, Wall Street Journal, 5/9). Also as part of the restructuring plan, WebMD plans to eliminate 7% of its workforce, or about 350 jobs. The cutbacks are in addition to the 1,100 job cuts that were announced last fall. Of the total 1,450 positions that are expected to be eliminated, 1,000 already have been cut from the company's payroll. The remaining jobs will be "trimmed" by the end of the year, the Atlanta Journal-Constitution reports. Marv Rich, WebMD's president, said, "We anticipate a continued decline in our operating expenses and remain confident that we will finish the year with a positive exit rate and that we will have created an organization with the infrastructure necessary to achieve significant growth rates in 2002 and beyond" (Paul, Atlanta Journal-Constitution, 5/9). In other WebMD news, the firm has reached an agreement with AOL Time Warner to provide health care content for America Online and create "co-branded" Web sites that will allow patients to communicate with their physicians and health plans (Wall Street Journal, 5/9).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.