Shares of Outfront Media Inc. (NYSE:OUT) were falling on Thursday after the outdoor advertising specialist released a disappointing second-quarter earnings report. As a result, the stock was down 9% as of 3:10 p.m. EDT.
The company, which functions as a REIT that owns transit and digital-display advertising properties and billboards, said that revenue increased 1.4% to $401.7 million, which matched estimates. Billboard revenue ticked up 2.3% to $280.4 million, but fell slightly in other areas.
The company reported a loss of $0.04 per share on the bottom line. But when adjusted for the one-time impairment charge in its Canadian business, earnings per share were $0.27. That was even with a year ago, but short of estimates of $0.31. Adjusted funds from operations, a closely watched figure in REITs that adds back items like depreciation and amortization, was $0.55, down a penny from a year ago.
Despite the weak earnings report, CEO Jeremy Male said, "As we look toward the second half, we see accelerating momentum on the top line, led by strength in our billboard business from local advertising and a better outlook for national."
Shares of Outfront Media approached a five-year low as outdoor advertising has been a tough sell in the digital era, when ad spending is flowing to online platforms like Alphabet and Facebook, which offer precise targeting. Clear Channel Outdoor, a competitor to Outfront, has seen its stock drop 51% over the last five years, and is similarly trading near a five-year low.
With a 7% dividend yield, Outfront Media may hold appeal for income investors, but considering the broader industry trends and the Canadian impairment, there may be some more challenges ahead for the company.