Lamar Advertising Shares Dropped: What You Need to Know

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: On a day like today, maybe Lamar Advertising (NAS: LAMR) investors should be pleased to see their stock only down 11%. I doubt they are, but maybe they should be...

So what: ...or maybe not. After all, the company did beat earnings this morning, reporting $0.12 per share in profit, a nice comeback from last year's second-quarter loss.

Now what: The problem, it seems -- aside from the general market panic today -- is that Lamar says next quarter's revenues will slip a bit from what it did in Q2, and fall below analyst estimates. For a stock that analysts were already thinking would be just marginally profitable, and sells for 85 times expected 2012 earnings, that's not good news. For a company that's trying to compete in a tough industry, burdened by $2.3 billion in debt, it's actually pretty bad news.

Are you feeling any more optimistic about Lamar than this?Add it to your Fool watchlist. See if they can turn this thing around.

At the time this article was published Fool contributorRich Smithdoes not own (or short) shares of Lamar Advertising. The Motley Fool has adisclosure policy. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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