HLTH Corp.s first-quarter financial results included a $60.1 million impairment charge related to its holding of auction-rate securities. Officials reported that as of March 31, the company, also known as Healtheon, held auction-rate securities with a face value of $363 million. The bonds are backed by student loans97% of which are guaranteed under the Federal Family Education Loan Program and all with AAA ratings when purchased, officials said. However since February all auctions have failed so while the securities continue to pay interest according to their terms, it limited the companys liquidity until the next successful auction, officials added.
The company reported net income of $463.2 million, or $2.04 per share, on revenue of $81.7 million, a 14% increase in revenue over the year-ago period. The income, however, reflects a gain of approximately $514 million net of tax from the sale of HLTHs 48% minority interest in Emdeon Business Services as well as the impairment charge.
Healtheon, which has plans to merge into WebMD Health Corp., also reclassified two subsidiaries as discontinued. Officials said that HLTH and WebMD expect to file a preliminary proxy statement relating to the merger in the next few weeks and to hold stockholder meetings in September to get the necessary approvals. HLTH is the majority holder of WebMD, a provider of health information services through public and private online portals.