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WebMD Health (WBMD) Q2 Earnings & Revenues Beat

Zacks Equity Research
Updated

WebMD Health Corp. WBMD reported second-quarter 2016 adjusted earnings of 39 cents per share, which beat the Zacks Consensus Estimate by a penny and was well ahead of the year-ago equivalent of 27 cents.

Quarter Details

WebMD reported total revenue of $167.6 million, highlighting a year-over-year increase of 13% and surpassed the Zacks Consensus Estimate of $166 million. This also exceeded management’s guided range of $163 million to $166 million. The stellar show was primarily a result of solid revenue growth in the company’s bio-pharma advertising business.

Notably, revenues from advertising and sponsorship totaled $131.7 million, an increase of 13.4% from the year-ago quarter, mainly buoyed by higher biopharma customer count. Revenues from biopharma and medical devices climbed 17% from the year-earlier quarter, while revenues from OTG, CPG and other clients increased 3%.

Health Service revenues were $28.6 million, an 8% increase over the prior-year quarter.

Revenues from information services were $7.2 million, signifying a 27% increase from the prior-year quarter of $5.7 million

 

In the second quarter, WebMd averaged 7.7 million global physician sessions monthly on Medscape, which increased 11% year over year. Moreover, Medscape registered around 656,000 U.S. physicians who are active on an annual basis, out of which an average of 403,000 U.S. physicians were active on a monthly basis in the reported quarter.

Additionally, WebMD published the popular Medscape Residents Salary and Debt Report and the Medscape Vaccine Acceptance Report. Also, the previous week, the company held a special event for 120 physicians on physician burnout at its corporate headquarters.

Notably, WebMD was recently awarded a six-year renewal for its ACCME accreditation via a joint certification for interprofessonal continuing medical education.

Meanwhile, adjusted EBITDA climbed 23% to $50.1 million, primarily driven by the company’s ability to leverage its infrastructure on higher revenue.

Traffic Highlights

During the second quarter of 2016, the number of unique users who visited the WebMD Health Network per month reached an average of 199.0 million, generating 4.23 billion page views. This signifies a 6% decrease in user count and a 3% rise in page views compared to the year-ago quarter.

WEBMD HEALTH CP Price, Consensus and EPS Surprise

WEBMD HEALTH CP Price, Consensus and EPS Surprise | WEBMD HEALTH CP Quote

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Guidance

For full-year 2016, WebMD anticipates revenues in the range of $695 million to $708 million, a rise of 9% to 11% from the prior year.

Revenues from advertising and sponsorship are projected in the $559 million to $570 million range, implying an increase of 12% to 14 % from the prior year. This optimism has been mainly driven by higher revenues from biopharma clients who account for 76.6% of the company’s advertising and sponsorship revenues.

Meanwhile, advertising and sponsorship revenues from OTC, CPG and other clients will signify 23.5% of its revenues and is likely to grow 2% to 5% in 2016.

Health service revenues are anticipated in the range of $109 million to $110 million. Meanwhile, revenues from information services are estimated in the band of $27 million to $28 million.

Adjusted EBITDA is projected in the range of $224 million to $232 million, an increase of 16% to 20% from the prior year.

For third-quarter 2016, WebMD expects revenues in the range of $168 million-- $171 million, an increase of 10% to 12% year over year.

Adjusted EBITDA is anticipated in the range of $50.5 million to $52.5 million, an increase of 9% to 13% year over year.

Zacks Rank and Key Picks

WebMD carries a Zacks Rank #4 (Sell).

Better-ranked stocks in the same space include Everyday Health. EVDY, Shutterstock. SSTK and Changyou.com Limited CYOU. All the three companies sport a Zacks Rank #1 (Strong Buy).

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