The stock price of online health information content vendor WebMD Health Corp. fell 30 percent on July 18 after the company downgraded its financial performance for the rest of 2011.
The stock fell in the morning after the announcement and did not recover much after the company issued a follow-up statement from Chairman Martin Wygod saying he has the "utmost confidence in WebMD's growth prospects and the future value of the company." However, speculators came in during early after-hours trading and boosted the stock by 13 percent.
WebMD now expects 2011 revenue of $580 million to $600 million, down from guidance on May 5 of $610 million to $640 million. The company expects adjusted earnings of $200 million to $210 million, down from the earlier guidance of $215 million to $230 million.
Factors affecting the new financial forecast include extended internal and regulatory review of biopharmaceutical sponsorship programs that are causing delays in launching the programs, unexpected delays or cancellations of new sponsorships sold in previous quarters that were scheduled to launch this year, and lower licensing revenue resulting from fewer anticipated new customers.
The company expects during the third quarter to launch new sponsorship services, and for advertising and sponsorship revenue growth to improve starting in mid-2012.
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