Market Overview

Earnings Preview: Live Nation to Report Q1 Earnings After the Bell

Live Nation Entertainment (NYSE: LYV) is releasing Q1 earnings after today's market close. The consensus analyst estimate for the concert producer's Q1 loss per share is $0.44, down significantly from the consensus 90 days ago of $0.33. For Q1 revenues, the consensus analyst estimate is $867.4 million.

The firm's consensus analyst estimates for earnings per share represent a 63% decline and for revenues represent a 2% increase from the same quarter last year. Live Nation's actual earnings per share have missed consensus analyst estimates by greater than 25% in both of the previous two quarters. Short sales represent approximately 7% of Live Nation's floating shares. Of seven major analysts who rate the company, four rate it Buy, two rate it Hold or Equal Weight, and one rates it Underweight.

Richard Tullo of Albert Fried & Co rates Live Nation a Buy with a $13 price target, around 60% higher than its current price. Tullo spoke to Benzinga about his position on the stock.

In today's earnings release, Tullo states, “Our focus is top down. We will be focusing on Revenue. I am looking for 2.5% revenue growth to about $870 million from about $850 million last year.”

Tullo says, “It's not a short term play. For long term investors who are patient, we think they will be rewarded for this play.” He explains that he expects the company to be profitable in 2013, but notes that it could be profitable much sooner if the global economy ramps up during this year's second half.

“We think that it has a defensible business model,” remarks Tullo. “The live concert is not something that can be easily replicated on the internet.” Tullo says he thinks thinks this business model will be bolstered by increasing participation in secondary ticket markets and the firm's new dynamic ticket pricing model, a tool for venues and artists to price event tickets.

Tullo says that Live Nation lost a lot of money because of the NBA lockout, but that he believes the ticket seller will benefit from robust summer ticket sales. He also claims that Liberty Media (NASDAQ: LMCA) owns around 20% of Live Nation and could be a potential acquirer in the future.

Martin Pyykkonen of Wedge Partners does not rate Live Nation. Pyykkonen also spoke to Benzinga about Live Nation, which he mentioned that some describe as a “legalized monopoly.”

Pyykkonen says he will mainly be paying attention to Live Nation's second quarter outlook in today's earnings release. He says that Q1, the quarter being released today, is a slower concert season than Q2, which is the peak season. Pyykkonen also says that Live Nation's ticket sales look good so far, with at least as many shows as last year.

Also, Pyykkonen mentioned Live Nation's new dynamic pricing model, which he sees as a method to bring larger turnouts to concerts, at the expense of ticket revenues. He states that this would benefit Live Nation by increasing revenues in areas like parking and concessions.

In addition, Pyykkonen voices that he thinks significant shareholder Liberty Media may want to increase its stake in Live Nation, but will not likely purchase the company outright in the near term.

Shares of Live Nation are currently up around 0.5% for the day, pricing them near $8.25.

Disclosure: At the time of this writing, I did not own shares of any companies mentioned in this post

Posted-In: Albert Fried & CoAnalyst Color Earnings News Price Target Previews Analyst Ratings Trading Ideas

 

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