Britain's ITV has today reported a bigger-than-expected revenue fall, sending its shares 9% lower, as the broadcaster's studios business continued to feel the effects of last year's strike by US writers.
Revenue at the "Coronation Street" broadcaster fell by 8% to £2.74 billion in the nine months to the end of September, worse than forecasts by analysts of a 4% drop.
Shares in ITV dropped to their lowest level since March, as Citi analysts called the update "disappointing".
ITV said its advertisers had held back bookings ahead of the British government's recent budget, exacerbating an already tough comparison in the current quarter against last year when it had benefited from the Rugby World Cup.
After a 6% rise in the first nine months, total ad revenue was expected be down around 6-7% in the final quarter. Analysts had expected a 1% drop in the quarter.
"Consensus forecasts will come down by 3%-5% in 2024 and the lower base will also drive a similar level of consensus downgrade in 2025 and beyond," Citi said in a note.
But ITV said Studios, which made dramas "Rivals" for Disney+ and "Ludwig" for the BBC, was on track to make record annual earnings, helped by final quarter efficiencies and deliveries.
ITV CEO Carolyn McCall said she would cut costs by another £20m this year, through reductions in content and bringing forward savings due next year.
Studios was performing well, she said, despite the impact of the strike and a softer market from free-to-air broadcasters.
"ITV Studios has had an excellent start to Q4, in line with expectations, which will ensure it achieves record profits in 2024," McCall said, adding that she was confident ITV as a whole would also increase its profit.
