eHealth (EHTH) Prelim. Q4, FY14 Estimates Miss Expectations

eHealth (NASDAQ: EHTH) announced preliminary financial results for the fourth quarter and fiscal year ended December 31, 2014.

Revenue for the fiscal year 2014 is expected to be in the range of $178 million to $180 million, compared to the company's guidance of $185 million to $194 million. EBITDA* for the year is expected to be in the range of $1.5 million to $4.0 million, compared to guidance of $13.5 million to $18.5 million. Non-GAAP net loss per diluted share* for the fiscal year 2014 is expected to be in the range of $(0.13) to $(0.04), compared to guidance of non-GAAP net income of $0.30 to $0.43 per diluted share.

*** The Street is at FY14 EPS of $0.05 and revenue of $187.2 million.

Revenue for the fourth quarter of 2014 is expected to be in the range of $43 million to $45 million. EBITDA* for the fourth quarter of 2014 is expected to be in the range of $(16.3) million to $(13.8) million. Fourth quarter 2014 non-GAAP net loss per diluted share* is expected to be in the range of $(0.56) to $(0.47).

*** Consensus estimates see Q4 loss of $0.11 per share with revenue of $52.6 million.

Gary Lauer, chief executive officer of eHealth, stated, "During the fourth quarter, we completed a successful Medicare Annual Enrollment Period generating Medicare application growth above our expectations. As a result we spent considerably more on Medicare marketing during the fourth quarter than we planned. In our Individual & Family Plan (IFP) business we are currently in the middle of the 2015 Open Enrollment Period. Our fourth quarter submitted IFP applications fell short of our expectations, and notably we had half the number of selling days under the Open Enrollment in the fourth quarter of 2014 compared to a year ago. Because we've historically experienced consumer demand in our market increase around major application deadlines, we expect to see strong IFP application volumes during the second half of this Open Enrollment Period and especially in the first two weeks of February just before it ends on February 15th."

Fourth quarter 2014 submitted applications for Medicare Advantage and Medicare Supplement products combined grew 46% to approximately 48,700 applications, compared to approximately 33,400 applications in the fourth quarter of 2013. The number of submitted applications for all Medicare products which also includes Prescription Drug Plans, grew 22% to approximately 64,800 applications, compared to approximately 53,000 applications in the fourth quarter of 2013.

Fourth quarter 2014 submitted applications for IFP products declined approximately 41% to 100,000 applications covering over 150,000 individuals.

Stuart Huizinga, chief financial officer of eHealth, commented on the fourth quarter preliminary financial results, "Fourth quarter revenues and earnings were impacted by a shortfall in our Individual & Family Plan sponsorship and advertising and other ancillary revenues driven by lower than expected IFP application volumes and by the timing of several million dollars of Medicare revenues which were pushed out into the first quarter of 2015. In addition, fourth quarter earnings were impacted by the fact that we spent considerably more than we planned on Medicare marketing costs due primarily to stronger than expected application growth in our Medicare business. We will provide more detail on the preliminary fourth quarter results during tomorrow's conference call."

These preliminary, unaudited results are based on management's initial review of operations for the quarter ended December 31, 2014, and remain subject to change based on management's ongoing review of the fourth-quarter results. The company will report final results for the fourth quarter and fiscal year 2014 in its regularly scheduled earnings release and conference call.

* EBITDA is calculated by adding stock-based compensation expense, depreciation and amortization expense, including intangible asset amortization expense, other (income) expense, net and provision for income taxes to GAAP net income (loss). Non-GAAP net income (loss) per diluted share is calculated by excluding intangible asset amortization expense, stock-based compensation expense and the estimated tax benefit related to these items.

You May Also Be Interested In

• Midday movers: Meta, IBM, Caterpillar fall; Chipotle rises
• Capitol Federal Financial (CFFN) PT Lowered to $6 at Keefe, Bruyette & Woods
• First Resource Bank (FRSB) Tops Q1 EPS by 43c