Why Live Nation Entertainment, Inc. (NYSE: LYV) stock is falling

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Live Nation Entertainment, Inc. (NYSE: LYV) stock lost over 7% on 1st November, 2019 (as of 1:38 pm GMT-4 ; Source: Google finance) after the company posted lower than expected results for the third quarter of FY 19. The entertainment company reported third-quarter 2019 earnings of $178.9 million compared with $172.68 million, a year earlier. The company has reported its highest adjusted operating income (AOI) in this quarter with the growth of 11% and 13% year-to-date. From the concerts business, there is 17% increase in AOI to $333 million from last year from 73 million fans attended over 26,000 concerts year-to-date. In the third quarter, sponsorship AOI increased by 18% and revenue was up 26%, mainly due to on-site sponsorship as the brand partners and from the addition of the first weekend of Rock in Rio in Brazil.

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Moreover, for the third quarter, Ticketmaster AOI grew by 20% and revenue was up 5%. Global GTV was up 4% for the quarter, on the back of fee-bearing GTV which was up 5%. As with the concerts business, international led to the ticketing growth in the quarter with its fee-bearing GTV, up 19%. Globally, primary GTV grew by 6% for the quarter while secondary GTV was flat.

LYV in the third quarter of FY 19 has reported the adjusted earnings per share of 71 cents, missing the analysts’ estimates for the adjusted earnings per share of 79 cents, according to Zacks Consensus Estimate. The company had reported 2 percent fall in the adjusted revenue to $3.77 billion in the third quarter of FY 19, missing the analysts’ estimates for revenue of $4.07 billion. The company’s concert revenue for the third quarter fell to $3.17 billion, compared with $3.3 billion a year earlier while the analysts expected concert revenue to be $3.5 billion.

Additionally, at the end of September, the company had total cash of $1.8 billion, that includes $747 million in ticketing client cash and $642 million in net concert event-related cash leaving free cash of $406 million. Net cash provided by operating activities for the nine months was $33 million compared to $256 million last year, mainly due to the timing of when payment obligations were due. Free cash flow adjusted for the nine months was $531 million in line with last year’s $529 million. Total capital expenditures were $225 million for the first nine months and the company expect total capital expenditures for 2019 to be approximately $325 million

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