Riverboat Costs Sink PlanetOut

PlanetOut (LGBT) sank late Tuesday after the gay-and-lesbian media outfit slashed second-half guidance.

The San Francisco-based company said it expects to post third-quarter revenue of $15 million to $16 million, which is below the $17 million Thomson Financial target. PlanetOut cited an unexpected increase in expenses related to itinerary changes for two of its four riverboat trips in August and September.

Also contributing to the company's revised third-quarter revenue projections is slower revenue growth expectations for Local Scene, PlanetOut's branded local advertising business, as well as advertising shortfalls at The Advocate magazine.

"Despite our disappointment in having to lower our revenue projections for the third quarter, we remain confident in our core strategy," said CEO Karen Magee. "We are taking a very pragmatic look at our business and have a high level of confidence that we are identifying the operational issues that need to be addressed. We are implementing broad process improvements that we believe will improve both our ability to forecast our business and execute on our operating plan."

The company is reviewing its full-year revenue guidance for 2006 and expects to significantly reduce its full-year EBIDTA guidance in its third-quarter earnings announcement currently scheduled for Nov. 2.

Shares fell 2 cents to $4.17.