AirMedia Posts Steep 2Q Loss On Higher Costs

SEATTLE (AP) ¿ AirMedia Group Inc., which runs networks of digital screens that carry advertising and content in airports and places ads on airplane TV screens, on Monday reported a second-quarter loss as costs surged as it expanded its business.

AirMedia said it doesn't expect those costs to ease this year, and issued sales guidance below Wall Street expectations. Investors sent shares down 90 cents, or 12.9 percent, to $6.10 in after-hours trading. Earlier, the stock slipped 2 cents to close the regular session at $7.

The Beijing-based company said it lost $7 million, or 11 cents per share, compared with a year-ago profit of $7.3 million, or 11 cents per share. AirMedia said the cost of placing more traditional advertisements like billboards and light boxes in China's Beijing and Shenzhen airports ¿ a deal announced in March ¿ was largely to blame for the loss.

The fees AirMedia pays to airports and airlines more than doubled in the quarter to $28.1 million. The company said it is in the process of renegotiating contracts with major airports, but it expects the fees to reach at least $29.5 million in the current third quarter and $35.5 million in the fourth.

Sales rose 24 percent to $36.8 million from $29.8 million in the year-ago period.

The results did top analysts' average estimates for a wider 13-cent loss and $36.1 million in revenue, according to a Thomson Reuters survey.

"Despite the weak economic environment in the first quarter of 2009 during which time most orders for the second quarter were placed, we still achieved a 23.7 percent year-over-year and 12.3 percent quarter-over-quarter growth of total revenues in the second quarter of 2009," said Herman Guo, AirMedia chairman and CEO. "We believe it indicated that the worst impact of the economic slowdown was over."

AirMedia forecast third-quarter revenue between $37 million and $40 million, below Wall Street's average estimate of $44.1 million in sales.

Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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