Entravision Stock Slides On Queasy Q2 Report

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For Hispanic media company Entravision Communications, net revenue was down in Q2 as the company swung from net income a year ago to a net loss of more than $16 million.


The company is blaming its revenue dip for “a trend” — a shift to self-service programmatic platforms.

Investors were less than pleased, sending shares of EVC down 11% on Wednesday.

Net revenue fell to $69.2 million, from $74.3 million, in Q2.

The move to programmatic is responsible, the company said, as approximately $3.8 million of the $5.1 million decline was attributable to Entravision’s digital segment — and was primarily due to declines in both international and domestic revenue.

That said, approximately $2.8 million of the overall decrease was attributable to Entravision’s struggling radio segment, with Q2 decreases in local and national advertising revenue.

Why? “Ratings declines and changing demographic preferences of audiences, as well as the absence of revenue from the 2018 FIFA World Cup revenue in 2019 compared to 2018,” were cited as reasons by Entravision.

As such, Entravision recorded a Q2 net loss of $16.28 million (-19 cents per share), compared to Q2 2018 net income of $4.84 million (5 cents).

By segment, TV was the clear winner in Q2:

Consolidated Adjusted EBITDA fell to $12.58 million, from $14.87 million.

Just two analysts participated in Entravision’s late Tuesday earnings call: Michael Kupinski of NOBLE Capital Markets, and Gordon Hodge, a longtime research analyst who launched Tracker Research in 2013.

Kupinski inquired about Entravision’s Q3 pacings for TV, with 2% growth expected. Does that include spectrum agreements and service agreements?

Entravision CFO/Treasurer Christopher Young said yes. “It includes all revenue streams, multicast, one-offs with the mobile telecom and advertising and retrans.”

In terms of the core business, what’s the problem spot, Kupinski asked.

“In terms of just the core business, what are you seeing — is auto the problem? Because I know that auto as a percent of total advertising revenues tend to be higher for you than even some of the English language TV stations,” Kupinski noted.

Young replied that automotive was down 1% for Q2, saying it was “basically flat and kind of in line with, I think, where the rest of the industry ended up.”

For Q3, automotive is pacing down 3 points.

With Wednesday’s Closing Bell, EVC finished at $2.80, falling 12.7%.

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