ITV’s share price jumped three per cent this morning as the broadcaster reported falling advertising revenues but talked up its “balanced and resilient business”.
The company’s advertising revenue dropped four per cent in the last quarter amid political and economic uncertainty.
And the broadcaster is forecasting an even larger dip – seven per cent – in the fourth quarter, meaning a full-year drop of three per cent.
But the company said it has become a “much more balanced and resilient business” and that earnings will be broadly in line with last year.
Total external revenue came in at £2.16bn, up five per cent year-on-year from £2.05bn.
Shortly after 8am this morning, ITV’s share price, which has dropped from above 200p before the EU referendum, was up three per cent to 171p.
Why it’s interesting
ITV’s advertising revenue decline comes as no surprise. Other broadcasters as well as print titles are also suffering from reduced advertising spend.
But ITV also said it expects to outperform the market in 2017.
Media analysts at Liberum were also positive on ITV, which they have a “buy” rating on, because of £25m of cost savings targeted by the broadcaster.
What the company said
Chief executive Adam Crozier:
As expected ITV ad revenue for the third quarter was down four per cent.
In recent weeks the political and economic uncertainty has increased and we are currently seeing more cautious behaviour by advertisers.
As a result ITV ad revenue is forecast to be down around seven per cent in the fourth quarter which means the full year will be down three per cent although ITV will again outperform the TV advertising market for 2016.
ITV is now a much more balanced and resilient business. Even against the current uncertain economic backdrop we expect 2016 earnings to be broadly in line with last year, driven by the growth in our high margin online, pay and interactive business and our studios business in the UK and internationally.