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Healtheon 2Q loss widens
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August 12, 1999: 4:00 p.m. ET
Medical Internet company's expenses rise, though loss per share narrows
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NEW YORK (CNNfn) - Medical Internet company Healtheon Corp. Thursday reported a wider-than-anticipated second-quarter loss as it spent more money trying to woo new clients to take on its electronic health commerce services.
Healtheon said its loss widened 28 percent to $17.6 million from $12.7 million a year earlier. The loss per share, however, narrowed to 25 cents from 47 cents because the company sold stock to the public during the quarter, doubling the number of shares outstanding. Analysts polled by First Call Corp. had expected a 22-cent loss.
Revenue more than doubled to $22.7 million from $10.9 million. The company's loss before depreciation and amortization expenses (EBITA) narrowed to $13.3 million in the second quarter from $13.9 million in first three months.
Healtheon's total operating costs jumped 72 percent to $40.9 million from $23.7 million as it worked on bringing new clients into its online system. Expenses associated with mergers and acquisitions also pushed up costs and affected Healtheon's bottom line.
Healtheon's stock price, since Monday
During the quarter, Healtheon announced its intentions to merge with WebMD, a privately held online healthcare and information services company in which CNN owns a stake. The deal involves a stock swap between the two companies' shareholders valued at roughly $7.9 billion. Microsoft Corp. (MSFT) and Excite Inc. (XCIT) both plan to invest in the new venture.
It also announced an agreement during the quarter to acquire MedE America (MEDE), a medical claims processing company, and Greenberg News Networks Inc., also known as Medcast, which offers an electronic news and information service targeting doctors.
At the same time, it signed up new users at a rapid clip. Last month Healtheon and WebMD collectively sold 35 healthcare systems, helping bring the number of physicians it services to 171,000. And from April to June, page hits -- the number of times a computer user clicks on a particular Web site -- more than doubled to 7.5 million from 2.9 million.
For the first six months, Healtheon posted a loss of $36.1 million compared with a loss of $22.3 million in the first half of 1998. On a per share basis, the company lost 55 cents a share compared with $1.27 the year before.
Healtheon shares jumped 3-5/16, or about 13 percent, to 34 in mid-afternoon trading on Nasdaq. 
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