Why Boston Omaha Stock Sputtered on Monday

What happened

Up-and-coming conglomerate Boston Omaha (NYSE:BOC) wasn't so up-and-coming on the stock exchange Monday. The company's share price slid by nearly 3% on a day when the bellwether S&P 500 index ticked higher. Investors were reacting to Boston Omaha's latest set of quarterly results.

So what

For its first quarter, the figures of which were released after market hours on Friday, Boston Omaha's total revenue was slightly over $22.8 million. That topped both the first-quarter 2022 results of $16.3 million and the average analyst estimate of $21.8 million.

That was the good news. The bad news was that the company flipped to a bottom-line loss of $3.3 million ($0.11 per share) according to standards based on generally accepted accounting principles (GAAP), against the year-ago profit of $16.3 million. Compounding that, the $0.11 figure was notably worse than the $0.06 consensus prognosticator estimate.

Boston Omaha saw revenue gains in all four of its core business lines (billboards, broadband internet services, insurance, and asset management). Of the quartet, broadband was a particular standout, with revenue more than doubling year over year to over $8.5 million. At the same time, however, costs and expenses associated with the activity nearly tripled.

Now what

Investors are rarely happy when their company flips to a loss, so the market's reaction to Boston Omaha's newly reported quarter was understandable. Yet it's still on a growth path, as that nearly 40% improvement in revenue attests. When and if the company gets a firmer grip on its costs, it should post far more encouraging bottom-line numbers. Patience might be the right strategy with this stock.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boston Omaha. The Motley Fool has a disclosure policy.