Special report A bitter pill The online medical industry tries to cheat death.

Elmwood Park, N.J.-based WebMD reported a net loss of $29.6 million, or 9 cents per share, compared with a loss of $1.04 billion, or $2.91 per share, a year ago.

Excluding restructuring, integration and noncash expenses, WebMD reported Tuesday a cash profit of $7.3 million, or 2 cents per share, compared with a loss of $32.7 million, or 9 cents a share, a year ago.

Twelve analysts polled by First Call had been expecting earnings of 1 cent a share to a loss of 3 cents a share, with a mean estimate of earnings of a penny per share.

Revenue fell to $196.3 million from $202.9 million a year ago.

For the past year, WebMD Chief Executive Martin Wygod has been promising cash profitability in 2002, a promise he delivered on in the first quarter.

"I'm very pleased with it. It came up pretty much what we anticipated. We went, in an 18 month period of time, from losing $100 million on a pro forma quarterly basis to our first full profitable quarter of $7 million and change," Wygod said.

"I think the profit was a little bit larger than the Street had anticipated and we're happy with it," he said.

Banc of America Securities analyst Patrick Hojlo said: "The numbers looked good. It was definitely a little better than we had expected. That's good news. The turnaround is progressing."

Wygod said the company may exceed Wall Street estimates for second-quarter earnings of 2 cents per share. For 2002, he expects earnings per share of 13 cents a share to 18 cents a share, compared with analysts' consensus estimate of 13 cents a share.

Wygod projects revenue of $800 million to $830 million, on cash earnings of $45 million to $60 million.

Wygod said the elimination of various businesses in 2001 resulted in lower revenue, but he said there was actually a significant increase in the top line.

"We're very optimistic and now we are going to be spending our energies during this transition year in building the top line and allowing the efficiencies that will come through to the bottom line as a result of the money we put into our infrastructure," he added.

Story Copyright  © 2002 Reuters Limited.  All rights reserved.

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