Don't expect those e-health

dogs to sit up anytime soon. Second-quarter results are unlikely to provide any treats.

"Investors would obviously like to see the hockey stick ramp-up and adoption, but I don't see that happening until the end of the year. I expect to see in-line results, and I don't expect to see any blowouts of the companies I cover, or blowups for that matter," says Jeffrey Peters, an analyst at

Dain Rauscher Wessels

.

"I think you'll see very poor results," adds Charles Trafton, an analyst with

Adams Harkness and Hill

.

The reason for unappealing results is that e-health companies like

Healtheon/WebMD

( IDXC) are still plotting and executing their strategies -- and producing big losses. E-health companies target physicians for their practice-management software and services, and plan to use the Internet to make physicians more efficient in their practices. Meanwhile, customers of traditional medical information-technology companies such as

IDX Systems

( IDXC) are wading through regulations that are slowing purchases, which is expected to dampen their results.

Healtheon/WebMD, the most-watched e-health company, is busy trying to put together its various acquisitions, which likely will weaken its second-quarter results. Peters, at Dain Rauscher, thinks Healtheon/WebMD's potential will be realized only once it has integrated its various acquisitions and finally offers the one-stop-shop it's been barking about.

"Healtheon is not going to launch their physician portal until all those mergers are completed towards the end of the year," he says. (Dain hasn't done any underwriting for Healtheon/WebMD.)

Jim Kumpel, an analyst at

Raymond James

, concurs: "I don't think there's going to be any surprise in the numbers. They've got a portal, but it's not rolled out in full. You need to build the on-ramp to the highway before you can drive on it." (Raymond James hasn't done any underwriting for Healtheon/WebMD.)

Looking for a Loss

Analysts expect Healtheon/WebMD to post a second-quarter loss of 35 cents a share, according to

First Call/Thomson Financial

. That's nearly double the year-earlier loss of 18 cents a share. The company expects to report results in late August.

Kumpel adds that investors should focus on how much of the company's revenue comes from big sponsorship deals and the viability of the companies contributing money. Several of Healtheon/WebMD's partners were planning on IPOs to meet their commitments. For example, on June 2 Healtheon/WebMD announced a $30 million, three-year portal deal with privately held

SimplyHealth.com

, an insurance information and sales site. The two companies will develop a co-branded site, which Healtheon/WebMD will promote in exchange for the $30 million.

Another e-health contender,

Allscripts

(MDRX) - Get Report

, is expected to post a loss of 24 cents a share for the quarter, compared with a loss of 48 cents a share a year earlier, according to

I/B/E/S

.

The company, which allows physicians to write electronic prescriptions, is expected to post $11.5 million in revenue, with 60% of that coming from e-commerce and 40% coming from traditional drug dispensing, says Trafton at Adams Harkness. (Adams Harkness underwrote Allscripts' secondary offering.) A year earlier it had $6.5 million in revenue, with just 30% coming from e-commerce and 70% coming from traditional drug dispensing. Allscripts now has 2,800 physician users, compared with 780 a year ago. It's expected to report earnings July 27.

And

MedicaLogic/Medscape

(MDLI)

is expected to post a loss of 69 cents a share, compared with an unadjusted 45-cent loss in the first quarter, according to First Call. (MedicaLogic completed a 5.9 million-share IPO in December 1999, raising $100 million.) In June, the newly merged companies announced they would cut their workforce by 10% over three months, reducing annual expenses by an estimated $20 million. The company made the move to hasten profitability, and it expects to realize the cost benefits by the fourth quarter.

The IT Set

Meanwhile, health care IT companies, which sell software and services to large customers such as hospitals, are feeling the effects of a new set of regulations resulting from the

Health Insurance Portability and Accountability Act of 1996, Trafton explains.

"We think hospital IT budgets are frozen right now, because of new rules regarding patient confidentiality. There are criminal penalties associated with not being HIPAA-compliant, but nobody knows what that

HIPAA compliant means," Trafton said.

For instance, IDX announced in late June that its second-quarter results would fall short of estimates. Analysts had expected it would post a loss of 12 cents a share, but it said it would lose 30 to 35 cents a share. The new consensus estimate is a loss of 33 cents a share, according to First Call, compared with a profit of 2 cents per share in the year-ago quarter. The company attributed the loss to an industrywide slowdown in its core systems business.

An exception in the sector is

Cerner

(CERN) - Get Report

. Kumpel at Raymond James says, "Traditional health IT companies pretty much all preannounced that this quarter is going to be pretty horrid. Cerner has done well by their own standards, but they're going up against some really weak comps." (Raymond James hasn't done any underwriting for Cerner.)

Analysts expect that Cerner will report that it earned 8 cents a share in the quarter, compared with 1 cent a share in the year-ago quarter.