WebMD Health Corp. said Chief Executive Cavan Redmond will be leaving the health information provider, less than a year after the former Pfizer Inc. executive was appointed to turn around the company's fortunes.
Shares of the company, which reported a smaller first-quarter loss, were up about 16 percent at $29.50 in after-hours trading. They closed at $25.51 on the Nasdaq on Tuesday.
The company said its senior vice president of strategic and corporate development, David Schlanger, will serve as interim CEO.
WebMD's earnings have been hit as consumers use its websites for specific information only without surfing the other content on the site.
"One of the areas of investment is in the areas of personalization to increase user frequency and how much time they spend on the site when they are there," Schlanger said to Reuters.
WebMD, which operates medical websites providing health and disease related information, has struggled with a fall in advertising revenue with pharmaceutical companies slashing marketing budgets as several blockbuster drugs go off patent.
WebMD also said Anthony Vuolo will be replaced as chief financial officer by Peter Anevski, currently a senior vice-president of finance.
"We do not believe this management change will adversely affect our recent momentum. Results that we issued today along with improved outlook for the balance of the year are a result of the collective efforts of our senior leadership team," WebMD Chairman Martin Wygod said on a conference call with analysts.
UPBEAT OUTLOOK, NEW IDEAS
WebMD expects full-year revenue of $450 million to $470 million, ahead of analysts' expectations of $444.6 million, according to Thomson Reuters I/B/E/S.
The company said it is developing a new channel called the healthcare reform center which will be launched to coincide with the next implementation phase of the Affordable Care Act in the fall.
"We believe that this channel will become a valuable resource for the tens of millions of consumers who will be responsible for choosing a health plan for the first time and will need to understand the impact of the Affordable Care Act (ACA) to themselves and their families," Schlanger said.
Schlanger told Reuters that the channel will be free and open to all users and its purpose will be to provide consumers with content and tools to help in understanding the ACA and make key decisions in choosing their health plan.
The company said the changes in Google's search algorithms increased the traffic to its flagship site, WebMD.com.
Public portal advertising and sponsorship which makes up most of its revenue stream rose 6 percent to $93 million, while overall revenue rose 5 percent to $112.8 million in the first quarter.
Schlanger said about 34 percent of the company's page views were delivered to U.S. mobile devices during the quarter.
"We have been able to sustain our overall traffic growth in an environment where PC traffic has been declining across the web," Schlanger said.
WebMD's net loss narrowed by about 80 percent to $1.5 million, or 3 cents per share, from $7.8 million, or 14 cents per share, a year earlier.
Analysts on average were expecting a loss of 15 cents per share on revenue of $106.6 million.
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