National CineMedia Shares Got Crushed: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of movie-theater advertiser National CineMedia (NAS: NCMI) were getting boos from investors today, falling as much as 21% in intraday trading after the company lowered its full-year outlook.

So what: Though the company confirmed its expectations for the third quarter, the fourth quarter is looking like it'll be softer than originally anticipated. National CineMedia's management team backed off previous expectations of revenue between $460 million and $470 million and adjusted operating income before depreciation and amortization (OIBDA) between $236 million and $246 million. It now sees revenue and OIBDA clocking in at respective ranges of $425 million-$435 million and $210 million-$220 million.

Now what: Management chalked up the tougher-than-expected fourth quarter to early advertising commitments to TV crimping the spending available for movie ads as companies tighten the advertising purse strings amid economic concerns. While this is a stinker for the fourth quarter, it may also have investors worried about early 2012 -- if economic sentiment doesn't reverse, smaller ad budgets could continue to provide a drag for National CineMedia's business.

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