Shares of iHeartMedia fell almost 17% after the broadcast-radio company said it expects revenue to fall in the current quarter before recovering later this year.
The stock fell 17% to $3.74 in midday trading. The stock is down 39% this year, compared with a 16% gain for the S&P 500 in the same period.
The company said it expects third-quarter sales to fall by a mid-single digit percentage, or by a low-single digit percentage when stripping out the boost from the sales of political advertising last year.
Analysts surveyed by FactSet saw third-quarter sales of $953.9 million, or a drop of about 3.5% from last year.
Chief Financial Officer Rich Bressler said on a conference call with analysts that revenue last month fell 5% from the same period last year. He said the company expects to generate a significant amount of free cash flow in the final quarter of the year.
Bressler also noted that the company is getting hurt by rising interest rates as about 40% of its debt is floating.
For the second quarter, iHeartMedia reported sales of $920 million, topping analysts’ expectations for sales of $906.1 million. The company’s quarterly loss of 16 cents a share was narrower than the loss of 19 cents a share that analysts expected.