Investing.com -- Getty Images cut its annual guidance after reporting an unexpected loss in the second quarter as impacts from the U.S. Hollywood strike and litigation costs weighed on performance.
Getty Images Holdings Inc (NYSE:GETY) stock was down more than 18.5% in premarket Tuesday following the report.
Getty reported a loss of $0.01 a share on revenue of $225.7 million, missing Wall Street estimates for $0.04 and $236.3M (NYSE:MMM), respectively.
Revenue fell 3.3%, driven by $7 million of incremental legal expenses related to ongoing litigation.
Looking ahead, the company lowered its guidance on revenue to a range of $920M to $935M from a range of $936M to $963M previously.
"Looking ahead, we are updating our Full Year 2023 guidance to reflect our performance through the first half of this year, ongoing macro-economic and Agency sector pressures, expected impacts from the U.S. Hollywood strikes, as well as litigation costs that are expected to be largely concentrated in the first half of 2023,” the company said.
Benchmark analysts reiterated a Buy rating and a $7 per share price target.
"While Agency revenue remains tied to a fluid macro, we are cautiously optimistic the weakness will bottom in 4QE with easing y/y comparisons. Further, we look forward to company progress and go-to-market execution of its new GenAI product, largely pointed at agencies in 4QE," the analysts said.
Citi analysts also defended the stock after the earnings-triggered selloff.
"While we recognize the continued pressures through the balance of 2023, we maintain our Buy rating given Getty’s growing subscription revenue, revenue mix-shift to corporate, and opportunity around GenAI, though we lower our TP to $6.50 given near-term macro headwinds."
(Additional reporting by Senad Karaahmetovic)