On Tuesday (5/4), iHeartMedia released its Q1 2023 earnings report. It was less than favorable, as the net loss attributable to the company surged to $222.26 million from $48.58 million and adjusted EBITDA declined to $93.42 million from $145.22 million.
While that was above the company’s guidance range, investors on Thursday opted to sell their shares in the nation’s No. 1 radio station owner and audio content creator and distributor in large fashion.
Just after 11am Eastern, IHRT was down nearly 20% in value. At the closing bell, IHRT was off by 17%, to $2.92.
At 11:04am Eastern, a 19.6% dip to $2.83 was seen for the company’s stock, which trades on the Nasdaq.
With a 1-year target estimate of $8.14, the drop brings a considerable challenge to the company on a day when another bank failure — Pacific Western Bank, with locations in California’s Central Coast — is rattling investors on Wall Street.
Peers such as Cumulus Media were down by 7.5%, to $2.70. However, the percentage decrease for iHeartMedia and its outsized presence in U.S. broadcast radio make that drop more significant — especially given iHeartMedia’s AM radio ownership.
The future of kHz-band access in vehicles has become a hot topic across the first half of 2023, and iHeartMedia is perhaps overexposed to the pending AM radio crisis than other stations. From WOR-AM in New York to KFI-AM in Los Angeles, iHeart’s spoken word properties could see significant troubles in the years ahead without a shift to FM. And, depending on the market, such a move could displace a music format that brings revenue to the company that would otherwise disappear.
What triggered Thursday’s iHeart selloff? That’s not an easy question to answer. However, it comes as Paramount Global shares slid 26.5% as revenue in Q1 came in at $7.27 billion — $16 million under the consensus estimate as compiled by Bloomberg.
Adjusted EPS for the owner of CBS Television Stations came in at $0.09. The consensus EPS was $0.14.
