SANTA MONICA, Calif. - Entravision (NYSE:EVC) Communications Corporation (NYSE:EVC), a significant player in global advertising solutions and media technology, has reported a substantial earnings miss for its fourth quarter ended December 31, 2023. The company posted a loss of $0.21 per share, which was notably below the analyst consensus estimate of $0.07. Despite the earnings shortfall, the company's revenue for the quarter reached $320.06 million, surpassing the consensus estimate of $308.5 million.
The fourth quarter results represent an 8% increase in revenue compared to the same quarter last year, indicating growth in the company's digital commercial partners business and contributions from recent acquisitions. However, this was not enough to offset the negative impact on earnings, leading to a sharp 29.9% decline in Entravision's stock following the announcement.
CEO Michael Christenson expressed disappointment in the earnings outcome but remained confident in the company's long-term prospects, citing the strength of Entravision's advertising and marketing platforms. "While we are disappointed in Meta’s decision, we are confident in Entravision’s long-term opportunities given the strength of our advertising and marketing platforms and the need for our solutions globally," Christenson stated. He also emphasized the company's solid balance sheet and cash position, which will support the business as it navigates these changes.
The earnings miss is particularly significant considering the company's update on its digital commercial partnership with Meta Platforms (NASDAQ:META). Entravision announced that Meta intends to wind down its Authorized Sales Partner program, which is expected to end by July 1, 2024. This program represented a considerable portion of Entravision's consolidated EBITDA and revenue for the full year 2023.
The company is now reviewing its operating strategy and cost structure and plans to provide an update on associated plans as soon as practicable. In the meantime, Entravision's board has approved a quarterly cash dividend of $0.05 per share, payable on March 29, 2024, to shareholders of record as of March 15, 2024.
Investors reacted negatively to the earnings miss, as evidenced by the significant drop in the company's share price. Entravision will continue to focus on its global advertising, media, and technology solutions as it adjusts its strategy in light of the recent developments with Meta Platforms.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.