Meanwhile the market was kinder to Seven West Media (SWM) which yesterday sprung an earnings downgrade on the market at its AGM in Sydney.
The Kerry Stokes-controlled company surprised with a cut to its estimate first half profit because of the slide in September quarter TV advertising revenues.
CEO Tim Worner told the company’s annual meeting in Sydney that the company was looking at a 10% fall in net after profit tax for the six months to December 27.
But Mr Worner said the company was still confident it would meet guidance for the full year’s profit to June 2015.
The market eased Seven shares down nearly 2% to $1.75 yesterday, a bit of a contrast to the bashing given to Myer shares.
SWM YTD – Weaker ad market weighs on Seven West
The cause of the weaker outlook is lower than forecast ad revenues for the market leading TV network, Seven.
It’s a situation that has hit all other networks, including Ten, Nine and their regional affiliates. The fall is despite Seven recording a 40% share of the lower ad market in the September quarter.
Seven earned a net profit of $150.1 million for the first half of 2013-14, meaning the company is looking at a drop of up to $15 million for the current half year.
Mr Worner said the lower profit was caused by the softness of the advertising market which fell in the September quarter, to the surprise of the industry.
He said that means ad revenues will be “flat to slightly negative” over the year to next June.
He said the slide in revenue had forced the company to attack costs and they will now be up around 1% instead of being up by around “the CPI rate” for the year to June (which meant around 2% to 3%). Mr Worner said that the cost-cutting means the company is still confident it will report "an underlying profit within the range of market estimates”.
