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WebMD Health Loss Narrows, CEO Cavan Redmond Resigns; Shares Surge

WebMD Health Corp. (WBMD) Tuesday reported a first-quarter loss that narrowed from a year ago, as advertising and sponsorship revenues increased. Both loss and revenues for the quarter were better than what Wall Street estimated.

WebMD Health, an online provider of medical news, also said its Chief Executive Officer Cavan Redmond will be leaving the company, after a stint of less than a year. Shares of WebMD surged 14 percent in extended trade.

The New York-based company said Redmond will resign as CEO and from Board of Directors, effective immediately. The board has appointed David Schlanger, SVP of strategic and corporate development, as Interim CEO. Redmond a former Pfizer Inc. (PFE) executive had taken over the reins of struggling WebMD on May 31 last year.

WebMD Chairman Martin Wygod said, "The change announced today will best position us to build on the momentum that our senior management team has created to date."

WebMD, which provides medical news, information and advices through websites, has been struggling lately after all major drug companies cut their advertising budgets, due to patent expiration and delayed product developments. WebMD generates majority of its revenue from advertisements and sponsorships.

The company also said Anthony Vuolo will be replaced by Peter Anevski as Chief Financial Officer.

WebMD's first-quarter loss narrowed to $1.5 million or $0.03 per share from $7.8 million or $0.14 per share in the prior-year period. On average, six analysts polled by Thomson Reuters expected a loss of $0.15 per share for the quarter. Analysts' estimates typically exclude special items.

WebMD's revenues for the quarter grew to $112.8 million from $106.9 million last year. Analysts expected revenues of $106.64 million for the quarter.

Public portal advertising and sponsorship revenue rose to $93.4 million from $87.8 million last year. Private portal services revenues inched up to $19.3 million from $19.2 million a year ago.

Looking forward to the second quarter, WebMD expects revenue to advance above $115 million and loss at about 1 percent of revenues. Analysts currently expects a loss of $0.09 per share and revenues of $107.88 million for the second quarter.

The company lifted its guidance for the full year 2013, citing improved outlook in its advertising business, particularly from its pharmaceutical clients.

WebMD now expects a full-year loss of $0.26 to $0.03 per share, on revenues of $450 million to $470 million. Analysts currently expect a loss of $0.30 per share on revenues of $444.01 million for the year.

Previously, the company expected a loss of $0.45 to $0.13 per share on revenues of $430 million to $455 million.

WBMD closed Tuesday's trading at $25.51, down $0.48 or 1.85%, on the Nasdaq. The stock gained $4.37 or 17.13% in after-hours trade.

by RTT Staff Writer

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