Central European Media Ltd., the broadcaster co-owned by Time Warner Inc., headed to its lowest level in about two months after the company cut its full-year guidance and cautioned against market developments in the fourth quarter.
The Bermuda-based operator of television channels in central and eastern Europe, known as CME, dropped 10.99 koruna, or 8.6 percent, to 117.01 koruna as of 9:25 a.m. in Prague trading as of 9:25 a.m. That’s the lowest level since Sept. 6 based on closing stock prices.
The prospects for the full year “indicate” that advertising markets are not recovering, Chief Executive Officer Adrian Sarbu said in a regulatory filing today. The advertising spending in the second half of the year hasn’t matched expectations, he said.
CME also cut its full-year forecast for Oibda, or operating income before depreciation and amortization, to be between $130 million and $140 million, compared with a previous $150 million to $160 million forecast.
CME said its third-quarter net loss shrank to $32.6 million from $82.2 million from a year earlier. Net revenue in the period declined 15 percent to $140.1 million.
CME is “seriously cautious” towards the fourth-quarter performance, Ceska Sporitelna AS’ analyst Vaclav Kminek wrote in a note to clients. The “significant” cut for full-year forecast is definitely “negative” news for the stock, Kminek wrote. He recommends investors to “hold” the shares.
The company operates channels in the Czech Republic, Bulgaria, Romania, Croatia, Slovakia and Slovenia. Time Warner holds 49.9 percent stake in CME.
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