Stock down 19% to $27.50
SFX Entertainment shares took a dive Thursday after two analysts slashed fourth-quarter earnings estimates based on sluggish ticket sales for year-end events.
The stock plunged 19% to $27.50. A peeved SFX issued a statement calling the dip an “overreaction” and insisting that all of its core businesses are performing well. And SFX said it had little interest in financial “micro managing to precise achievement of analysts’ estimates.”
Goldman Sachs and Bear Stearns both cut their quarterly earnings estimates to $40 million from $45 million and $46.5 million, respectively.
New Year’s Eve letdown
Gotham-based SFX did acknowledge that New Year’s Eve 1999 has been somewhat of a letdown for the entertainment industry, “creating slightly disappointing results for SFX for that one night.” But the company said it was much less exposed to the millennium eve than some others in its sector since it “hadn’t participated in the types of blockbuster events which have created losses or cancellations.”
Management has been telling Wall Street that cash flow for 1999 is about 2% below consensus estimates.
SFX also said it had rejected several sponsorship deals that it thinks undervalues its inventories.