LAS VEGAS — Citadel Communications Corp. shares fell as much as 48% after the radio station owner said its third-quarter loss widened because of acquisition and interest expenses.
The stock dropped $7.38 to close at $8.63 on Nasdaq on Wednesday. It traded as low as $8.25, the lowest price since Citadel first sold shares to the public at $16 in June 1998. The Las Vegas-based owner of radio stations in mid-size markets reported late Wednesday that its loss widened to $11.2 million, or 30 cents a share, from $2.8 million, or 9 cents, a year earlier. Citadel cited the costs of buying 21 stations and selling three stations, along with higher interest expenses, for the wider loss.
"You really hadn't had a general interest radio group miss their number by such a significant level in at least six or seven or eight quarters," said Jim Boyle, an analyst at First Union Securities, who cut his rating on the stock to "market perform" from "buy." "Here they are pretty much the first guy, and they missed by a nickel. The near term is headed for the exits."
Sales rose 55% to $78.2 million from $50.5 million, buoyed by the acquisitions. Revenue from stations owned in both years rose 1%, well below analysts' estimates. Several analysts cut their ratings on the shares because of the lower revenue and lower-than-expected after-tax cash flow.