Why Central European Media Shares Fell

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What: Shares of Central European Media Enterprises were picking up mostly static today, falling as much as 14% on a disappointing earnings report.

So what: Because of a non-cash impairment charge of $522.5 million, the European broadcaster posted a loss of $494.2 million for the quarter. Revenue declined 8.5% to $253.3 million as the TV ad market became weaker because of the sluggish European economy. Including the impairment charges, CME, as the company is known, posted a $6.96 per share loss for the year. In his comments, CEO Adrian Sarbu noted the tough economic climate and said, "Challenging times require bold actions: increasing advertising prices and carriage fees."


Now what: Considering the transition of advertising to media such as the Internet and now mobile devices, it's unclear if the company will be able to sustain the proposed price increases. The European economy still seems at least six months away from shifting into recovery, and CME needs the macroeconomic environment to improve for it to start turning a profit again. I'd stay away from this one, especially with more potential goodwill writedowns on the way.

Want to get updated on Central European Media? Add the company to your Watchlist by clicking right here.

The article Why Central European Media Shares Fell originally appeared on Fool.com.

Fool contributor Jeremy Bowman and The Motley Fool have no position in any of the stocks mentioned. 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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