Please ensure Javascript is enabled for purposes of website accessibility

Why Entercom Communications Corp. Stock Fell Tuesday

By Daniel Sparks - Updated Nov 6, 2018 at 4:43PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Here's where Entercom missed the mark -- at least in terms of analyst expectations.

What happened

Shares of Entercom Communications (ETM -2.50%) fell on Tuesday, declining as much as 14.4%. By market close, the stock was down about 10.3%.

The stock's decline comes as the radio broadcasting company reported earnings per share that slightly missed the consensus analyst estimate for the key metric.

A chalkboard sketch of a chart showing a stock price falling

Image source: Getty Images.

So what

For its third quarter, Entercom reported revenue of $378.5 million, up from $122.3 million in the year-ago quarter. On a same-station basis, though, revenue in the year-ago quarter was $395.2 million. Entercom's $378.5 million in revenue was slightly ahead of a consensus analyst estimate for revenue of $378 million.

The company's earnings per share for the quarter was $0.26 -- up from $0.09 in the year-ago quarter, but below a consensus analyst estimate for earnings per share of $0.27. 

Though the market responded pessimistically to the results, management was optimistic. In the company's third-quarter earnings release, Entercom CEO David Field had this to say:

As we close in on the one year anniversary of our transformational merger with CBS Radio, we are very pleased with our progress and excited about the momentum we are building across multiple growth initiatives.

Now what

Looking ahead, Field said Entercom's fourth quarter is on track for growth, "currently pacing up 4%." This view reflects management's optimism for the second half of the year expressed in Entercom's second-quarter earnings release two months ago.

Management also said it expected synergies to drive "solid double digit EBITDA growth in the fourth quarter."

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Entercom Communications Corp. Stock Quote
Entercom Communications Corp.
ETM
$1.17 (-2.50%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.