Why Clear Channel Outdoor Sank

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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 outdoor advertising company Clear Channel Outdoor (NYS: CCO) plunged as much as 12% earlier in the trading session today after the company reported first-quarter earnings results.

So what: For the quarter, Clear Channel Outdoor reported a marginal boost of 0.1% in revenue to $651 million while losses widened from the year-ago period to $0.14 from $0.03. Both figures fell shy of Wall Street's consensus estimate for a loss of $0.08 on $662.1 million in revenue. The company cited weak international revenue in Europe as the main reason for the drop in earnings. International sales accounted for 56% of Clear Channel Outdoor's revenue in the first quarter.


Now what: This is becoming a nasty trend given that Lamar Advertising (NAS: LAMR) nosedived yesterday after it missed the Street's expectations. But the thing to remember with Lamar is that it missed largely due to an early debt extinguishment. Clear Channel Outdoor's miss was entirely based on sales weakness, which could make it the weakest among its peers. For now, I'm perfectly happy avoiding the company like the plague!

Craving more input? Start by adding Clear Channel Outdoor to your free and personalized watchlist so you can keep up on the latest news with the company.

At the time this article was published Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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