Cars.com Inc. shares tumbled 35% Monday after the digital marketplace for car sales said its board has completed a strategic review without receiving any actionable bids and will now work to execute a plan to drive growth.
The review was first announced on Jan. 16 and came after a push from activist shareholder Starboard Value.
“After consultation with our financial and legal advisors, the board has concluded that the best interests of shareholders are served by continuing to focus on our strategic plan and opportunities to drive growth and shareholder returns as an independent public company,” the company said. “We remain open to all potential value creating opportunities.”
In a detailed statement, the company said it had talks with more than 25 parties on a possible deal without reaching agreement.
The announcement came as the company
reported earnings for the second quarter with revenue and guidance falling short of analyst estimates.
Cars.com posted a net loss of $6.0 million, or 9 cents a share, for the quarter, after net income of $12.7 million, or 18 cents a share, in the year-earlier period. Adjusted per-share earnings came to 30 cents a share, ahead of the 10 cents FactSet consensus.
But revenue fell to $148.2 million from $168.5 million, below the $160 million FactSet consensus.
“While many trends are positive, continued reductions in OEM (original equipment manufactures) advertising and delayed OEM certifications that facilitate sales to thousands of franchise dealers on a preferred basis, have impacted our 2019 outlook,” said Chief Executive Alex Vetter. “We have taken action to convert the remaining affiliate markets one year ahead of schedule, which will benefit revenue in 2019. We are focused on executing our strategy to return to revenue growth and achieve double-digit Adjusted EBITDA growth in 2020.”
The company is expecting full-year revenue to fall 6% to 9%.
Average monthly unique visitor count grew 13% in the quarter, while total traffic rose 16%. Mobile traffic rose 23% to account for 71% of total traffic, up from 67% a year ago.
Chief Financial Officer Becky Sheehan said the company is on track to deliver more than $30 million of annualized cost savings.
The stock has fallen 45% in the year to date, while the S&P 500
has gained 14% and the Dow Jones Industrial Average
has gained 11%.