WebMD swings to 3Q profit, makes an acquisition
WebMD Health Corp. said Tuesday that it earned a third-quarter profit on rising advertising revenue, and it raised its forecast for the year.
The increase still appeared to disappoint investors, and shares dropped in extended trading.
The health information website expects to earn net income of more than $12 million, or 24 cents per share, and post revenue of more than $510 million in 2013, up from a prior forecast of 6 cents to 21 cents per share in earnings on revenue of $485 million to $505 million.
Analysts were expecting net income of $12.8 million on revenue of $511.7 million.
The company also announced that it agreed to buy Avado Inc., a developer of programs for doctors to manage patient information. Terms were not disclosed. Avado was founded in 2010 and its technology has been tested in doctors' offices and medical centers, WebMD said.
WebMD shares rose $1.30, or 3.7 percent, to close at $36.84 before the results and acquisition were announced. In after-hours trading, the shares were down $1.84, or 5 percent, to $35. The stock has more than doubled this year.
WebMD's net income in the third quarter was $3.2 million, or 6 cents per share, compared with a year-ago loss of $885,000, or 2 cents per share. WebMD said that excluding a loss on convertible notes it would have earned 10 cents per share. Revenue rose 11 percent to $130.9 million.
The company said that traffic to the WebMD Health Network averaged 138 million unique visitors per month, a 29 percent gain.