Earnings: WebMD Q2 Revs Up 15 Percent; Income Up 25 Percent; Pharma Ads Coming Back?
This story was written by Joseph Weisenthal.
Health portal WebMD (NSDQ: WBMD) reported revenue of $89.2 million, a 15 percent increase from $77.3 million in the year-ago quarter. Net income from continuing ops of $6.4 million ($.11 per share) were up 25 percent from last year's $5.1 million ($.09 per share). The company's core segment, online services, had revenue of $84.6 million, up 16 percent from last year. That was mainly due to 19 percent growth in advertising and sponsorship revenue. Earlier this year the company lowered its outlook for the year due to advertiser hesitance and the business climate, but in the announcement the company simply maintains the forecast. As for the company's merger with HLTH, it currently expects the deal to close in October.
On the conference call, CEO Wayne Gattinella sounded optimistic about the ad market, and sense that pharma buyers were coming back strong: "what you are sensing is a stronger feeling in the market as clients are both plan for 2009 and as we expect, they start front buying for the following year that we should see in the back half of this year. We saw a promotional spend on the part of big pharma, moderate somewhat as we entered 2008. Certainly we know they were hit with several product issues as the year began. Our sense now is that we are seeing a different outlook from big pharma as they are planning for '09."
Later he noted this on WebMD's view of the ad market vs. other online firms who are seeing more weakness: "We know that there is a lot of price competition in the low end of the media market where there is an abundance of inventory that is being marketed with a lot of overlap and not a clear picture of what the unique value is. We do not play in that space..."
Release | Conference Call Transcript (via SeekingAlpha)
By Joseph Weisenthal