Why WebMD Shares Popped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of WebMD , a health information services company, shot higher by as much as 20% after the company announced its first-quarter results and announced the departure of its CEO.
So what: For the quarter, WebMD reported a 5% increase in revenue to $112.8 million, primarily due to a 6% increase in public portal advertising and sponsorships, with 34% of all page views coming from mobile sources. The company's loss narrowed to just $0.03 per share from a loss of $0.14 per share in the year-ago period. Wall Street's expectations had been looking for $106.6 million in revenue and an EPS loss of $0.15. Furthermore, WebMD upped its full-year revenue forecast to a range of $450 million to $470 million compared to the current consensus of just $444.6 million. Leading to this new forecast is a move by the company to create a new channel known as the "health care reform center" which should help consumers when choosing a health plan in light of the coming implementation of the Patient Protection and Affordable Care Act.
In addition its earnings report, WebMD announced that current CEO Cavan Redmond will be stepping down and that David Schlanger, the current senior vice president of strategic and corporate development, will serve as the interim CEO.
Now what: That is a lot of information to swallow all at once! WebMD's results are certainly higher than what the Street expected, which is always a positive, but profits continue to remain elusive -- which begs me to keep my distance from WebMD. If the company can monetize its new PPACA channel, then I can see quite a benefit to the bottom line; but there's no guarantee that WebMD will actually be able to do that.
Craving more input? Start by adding WebMD to your free and personalized watchlist so you can keep up on the latest news with the company.
How will Obamacare affect your investments?
The Affordable Care Act will undoubtedly have far-reaching effects. The Motley Fool's new free report, "Everything You Need to Know About Obamacare," lets you know how your health insurance, your taxes, and your portfolio will be affected. Click here to read more.
The article Why WebMD Shares Popped originally appeared on Fool.com.Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.