WebMD Lowers Revenue, Income Expectations
It’s more than a little ironic, but WebMD isn’t looking too healthy; the company has cut its 2008 financial outlook. On the bright side, there’s a possibility that this is only WebMD’s problem, as opposed to something representative of the online economy.
WebMD was expecting to earn between $395 and $415 million in revenue. It now predicts that the figure will land between $380 and $395 million. Net income will suffer in the same fashion, dropping from between $36.5 and $46.0 million to the $29.5 to $37.5 million range.
WebMD’s stock, meanwhile, has lost about 13 percent of its value in the last two days.
Fleeing advertisers appear to deserve direct blame for the situation; the company then states that they’re being "driven by increased caution in the current business climate."
But Kim Peterson responds, "I think Goldman Sachs analyst Jennifer Watson is on to something when she said that advertisers might be testing cheaper alternatives, such as new ad networks that target smaller health sites. If that’s the case, then WebMD’s problems are more serious than the company is projecting. It’s losing customers to the competition, not to the slowing economy."
That would be good news for everyone not connected to the company, at least.