NEW YORK (AP) ? WebMD Health Corp. said Wednesday its net income rose 4 percent in the third quarter as its ad revenues increased, but it badly missed Wall Street’s expectations and lowered its revenue estimates for the fourth quarter.
WebMD’s shares fell 14 percent to $29.01 in after-hours trading following the release of the earnings report.
The company, based in New York, posted net income of $14.2 million, or 24 cents per share, compared with $13.6 million, or 22 cents per share, in the same quarter a year ago. But without one-time items, including a $3 million gain from discontinued operations in the third quarter, WebMD would have earned $11.6 million, or 20 cents a share.
Revenue was down slightly to $135.1 million from $135.3 million.
Analysts, who typically don’t consider one-time items in their forecasts, had expected earnings of 28 cents on revenue of $136.3 million.
WebMD said advertising and sponsorship revenue rose 2 percent to $115 million and page views to its Web site increased 26 percent to 2.24 billion. But the gains were offset by a 10 percent decline in revenue from private services. WebMD provides health and benefits information to employees at 121 companies and health plans.
It said it now expects its fourth-quarter revenue to be $147 million to $157 million, far short of analysts’ expectations of $171.5 million.
The company said it has typically seen a jump in media buying in the fourth quarter as drug and consumer products companies use up their unspent promotional dollars before the end of the year. But this year, WebMD said companies are watching their cash more closely.
“With the pharmaceutical industry spend on digital marketing stuck at 5 percent, we understand our mission and will intensify our effort to roll out new products as well as demonstrate to our customers the unique WebMD capabilities that we believe will provide superior return on their marketing investment,” WebMD Chairman Martin Wygod said in a statement.
