Healtheon Loss Widens as Revenue Rockets

Healtheon/WebMD Corp. said its first-quarter loss widened in line with analyst expectations as revenue nearly quadrupled.

Healtheon, an Internet site linking insurers, doctors and patients, said it lost $431.5 million, or $2.47 a share, up from $18.6 million, or 30 cents, a year earlier, because of marketing and acquisition costs.

Excluding $358.5 million in amortization and depreciation, the company had an operating loss of $85.9 million, or 49 cents a share, contrasted with a loss of $11.8 million, or 19 cents, a year earlier. Analysts polled by First Call/Thomson Financial expected Healtheon to lose 48 cents a share.

Revenue nearly quadrupled to $65.9 million from $17.6 million as Healtheon sold more subscriptions and advertising.

Healtheon’s consumer-information site had 2.9 million unique visitors in March, a 70% increase from 1.7 million in December.

“They’re showing good progress in the business, particularly in terms of advertising and electronic-commerce revenue,” said Deutsche Banc Alex. Brown analyst Conan Laughlin, who has a “market perform” rating on the stock.

In addition to subscription fees for its physician Web site, Healtheon gets revenue from doctors and physician assistants who use Healtheon’s system to process medical claims and to check for insurance eligibility.

This transaction revenue, which at $28.9 million made up 44% of sales in the quarter, was little changed from the previous quarter, analysts said.

“We see our losses coming down sequentially quarter-by-quarter,” said Jeffrey Arnold, Healtheon’s president and chief executive. “We’re very much focused on profitability.”

Healtheon rose 25 cents to close at $20 on Nasdaq.

At a Glance

Other technology-sector earnings, excluding one-time gains or charges unless noted, include:

* Ashford.com Inc., an Internet seller of luxury goods, said its fiscal fourth-quarter loss widened to $41.3 million, or 92 cents a share, from $1 million, or 5 cents, on costs to market and operate its Web site. Excluding special items, the company lost 30 cents a share, compared with a loss of 31 cents analysts expected. Sales rose to $11.8 million from $2.47 million, topping the $10-million forecast of EOffering analyst Shawn Milne.

* CDNow Inc. said its loss narrowed in the first quarter as the Internet music seller added more customers. CDNow’s loss including special items declined to $37.8 million, or $1.23 a share, from $38.2 million, or $1.28 cents, a year earlier. The results have been adjusted as though CDNow owned N2K Inc., which it acquired, at the start of last year. Before special items, including the write-off of the Cosmic Music Network, which was discontinued, the loss was 92 cents. Sales rose 27% to $43.6 million. BancBoston Robertson Stephens analyst Lauren Cooks Levitan had forecast earnings of 88 cents and $45 million in sales.

* Go.com Inc., the Internet unit of Walt Disney Co., said its per-share loss widened in its fiscal second quarter to $72.6 million, or 47 cents a share, from a loss of 21 cents a year ago, as it spent heavily to build up the company’s Web sites and refocus them on entertainment. Revenue rose 38% to $97.6 million. Analysts expected a loss of 54 cents.

* Perot Systems Corp., the computer services company founded by billionaire Ross Perot, said first-quarter profit rose 17% to $18.9 million, or 17 cents a share, a penny better than forecasts. Sales were virtually flat at $274.6 million.