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October 26, 2007
Central European Media Enterprises Meeting Recap
The CETV analyst meeting that brought me to Bucharest, Romania, wrapped up just before the open of NY trading last Thursday. All is well. The company raised its 2007 guidance as I had expected in the preview of the meeting I posted earlier this week. Revenue guidance is now $795-820 million up from $764-798 million. EBITDA guidance is now $285-305 million up from $272-298 million.
As is often the case with CETV the composition of the results is somewhat different than I expected. The big upside in the new guidance is in Ukraine where third quarter political advertising and an uptick in ratings so far this fall now has EBITDA in a broad range of $22-35 million for the year. CETV has lost money in Ukraine year to date and had lowered guidance earlier this year when they were unsure of a turnaround. My spreadsheet had breakeven for 2007 heading into the meeting. Czech Republic, Romania, Slovenia, Croatia, and Slovakia all remain on track with my original expectations. I'd bet CETV reaches the upper of its guidance when all is said and done in 2007.
I also heard nothing to change my expectation for a couple of years of 20-30% growth off the 2007 base. If those numbers are achieved, plenty of upside remains.
Just for fun CETV showed a chart of its stock against GOOG indexed to just before GOOG's IPO. Pull it up. It made me not feel so bad about missing GOOG, the greatest media/advertising play on our side of the Atlantic. At least I got the one over in Central Europe.
Posted by Steve Birenberg at October 26, 2007 01:43 PM in CETV
1.CETV WAS DOWN $7 AND MICC WAS UP $7 ON NO SUBSTANTIAL NEWS.OTHER THAN A VERY VOLATILE,CRAZY
MARKET,WHAT IS GOING ON?
2.WHAT DO YOU THINK THE FED ACTIONS/STATEMENT WILL DO TO CETV/MICC AND TO GOLD/OIL FOR THE SHORT AND INTERMEDIATE TIME PERIOD?
Obviously, there is a size seller in CETV. When stocks get down this far in a single day buyers often hesitate figuring something must be going on. I think it is just a correction of the incredibly sharp move up over the past month. I trimmed client positions yesterday near $116. I would not worry about it. The news is all good and the earnings report and conference call tomorrow should be reassuring. I'd be a buyer again in the $100-110 range.
As for the Fed action, I have no idea. I thought the statement was hawkish and we would sell off. Ooops. Clearly there is a very bullish trend in place. It appears the trend is not changing based on the reaction. Thus, MICC, CETV, gold, and oil should stay on their trend which is upward. I do think today's selling in CETV should be a reminder that when the market do turn south losses will be quick and severe in the winners. That is why i trim my winners as they rise.
Posted by: Steve at October 31, 2007 02:06 PM