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WebMD CEO David Schlanger
Schlanger

WebMD sees huge profit in 2nd quarter thanks to online boom


By Bob Herman
Posted: August 5, 2014 - 6:30 pm ET
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Second-quarter net income soared nearly 275% for WebMD Health Corp., prompting the health information company to raise its financial guidance for the rest of the year.

WebMD CEO David Schlanger, who took the helm last August, told analysts on an earnings call late Tuesday that the company has experienced an “increasing demand from advertisers” to reach its growing online audience—emblematic of today's consumer-driven healthcare.

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WebMD's most popular service is the consumer-facing WebMD.com, which allows people to find health information on various diseases and conditions. WebMD also owns WedMD Magazine and Medscape, publications that target patients and physicians, respectively.

An average of 179.4 million unique users visited WebMD's websites each month during the second quarter, up 43% from the same period a year ago, leading to almost 3.5 billion page views in the quarter.

“We believe the strong foundation we built will allow us to expand into new areas,” Schlanger said.

As the next open-enrollment period for the insurance marketplaces gears up this fall, Schlanger said that health insurers, exchanges and the government have expressed interest in reaching WebMD consumers and helping them navigate to the right sites.

People who use an iPhone or other mobile device to access WebMD have represented the most growth for the company.

In the quarter, WebMD's profit totaled $9.7 million, far above the $2.6 million net income recorded in the same period of 2013. Revenue increased 12% year over year, totaling $140.4 million in the second quarter.

For the six months ended June 30, WebMD recorded $16 million in net income and $274.2 million in revenue, compared with a $1 million net income and $238.1 million in revenue in the first half of 2013.

WebMD expects full-year revenue will land between $570 million and $580 million, with profits ranging from $36.5 million to $40.5 million. That guidance is up from the first quarter, when WebMD predicted low-end revenue and profit targets of $560 million and $32.5 million, respectively.

WebMD's shares closed Tuesday at $47.95, up more than 21% so far this year.

Follow Bob Herman on Twitter: @MHbherman


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