Why National CineMedia Shares Dropped

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What: Shares of National CineMedia were getting left on the cutting room floor today, falling as much as 11%, after reporting earnings last night.

So what: National CineMedia, which produces advertising for movie previews and in movie theaters, said that earnings per share came in at $0.16, missing estimates by $0.01, and revenues grew by just 1.1%, to $115.9 million, also missing expectations. Guidance for the first quarter was better than the experts predicted, but worse for the year. National CineMedia said it sees a sales increase of just 1% to 4% for 2013 now. CEO Kurt Hall said the company had a strong year, but got hurt in Q4 by Hurricane Sandy, and what he called the "sputtering" of the economy.


Now what: National CineMedia shares recovered most of their losses during the trading session, but still finished down about 3%. Traditional advertising of all forms is struggling in the digital age, as National CineMedia's slow growth confirms. Due to that shift, I'm inclined to stay away.

Get more on National CineMedia.

The article Why National CineMedia Shares Dropped originally appeared on Fool.com.

Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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