What: Shares of TV station operator Gray Television (GTN 3.18%) got disconnected today, down by as much as 19%, after the company reported second-quarter earnings and said it expects costs to increase significantly going forward. At 3:25 p.m., shares were down 7.8% from the previous close.

So what: Revenue during the quarter jumped 34% to $143.5 million, setting a new second-quarter record, which translated into net income of $12.1 million, or $0.17 per share. While both top- and bottom-line results beat the Street's expectations of $142.5 million and $0.13 per share, respectively, guidance spooked investors.

Now what: Gray Television expects third-quarter broadcasting expenses to increase for a handful of reasons. Employee payroll and benefit costs will rise, in addition to network fees. That could put some pressure on the bottom line, even though revenue is expected to rise 8% to 10%. Since it's an "off year" of the two-year election cycle, the company expects political advertising revenue to decrease dramatically by 91%, but that's to be expected. Gray acquired five stations during the quarter, and disposed of two.