Lamar Advertising said it is cutting spending on new digital displays by more than half, freezing hiring and reevaluating planned shareholder dividends because of the uncertainty caused by the coronavirus pandemic.
The Baton Rouge-based outdoor advertising company has withdrawn its full-year financial guidance for 2020. In February, the company said it was projecting earnings between $3.55 and $3.69 per share.
Sean Reilly, chief executive officer, said Lamar started the year with "tremendous momentum," but the measures taken to control the spread of the disease have taken a toll on the company and the broader economy. The digital billboard business is a good gauge of overall economic health.
"With their customers confined to their homes and unable to shop, dine or play, many businesses have temporarily curtailed their advertising campaigns," Reilly said in a statement.
Lamar said it is looking at measures to adjust its business. The company had projected spending $130 million on capital projects, including new digital displays. The plan now is to spend about $58 million, with maintenance costs accounting for $26 million of the total. A hiring freeze and suspension of acquisition activity has been established. Lamar said it is also looking at talking to airport and transport partners about relief from annual contract guarantees regarding advertising displays.
The company had earlier announced plans to pay out dividends of $4 per share spread out quarterly during 2020. The company paid a $1 per share dividend on Tuesday, but it is trying to get a better sense of the depth and duration of the economic slowdown. The priority is the long-term health of the company, Reilly said.
Shares of Lamar were down $5.18, or 12%, to slightly under $43 Thursday.