ITV Third-Quarter Ad Revenue Drops 6 Percent Due to BBC Olympics Coverage
LONDON - U.K. TV networks giant ITV on Tuesday reported lower advertising revenue for the third quarter as the Summer Olympics coverage on public broadcaster BBC was a drag on the company's ratings and ad momentum.
But the company's ITV Studios content production arm continued to grow and will bring in a solid profit for the full year, it said.
The TV company also said it has continued to outperform the overall U.K. TV advertising market despite the challenges in the latest quarter and
continues to expect "broadly flat" ad revenue for the full year. October and November are each down around 2 percent in terms of ad revenue, it said.
ITV reported a 6 percent decline in advertising revenue for the third quarter, in line with or slightly better than most analysts' expectations and better than the broader market.
In its financial update Tuesday, ITV also said that total revenue rose 4 percent for the first nine months of 2012 to $2.50 billion (£1.57 billion).
Broadcasting and online revenue rose 1 percent for the first nine months. ITV Studios once again was a growth unit as its revenue rose 20 percent to $790 million (498 million). The company's total non-advertising revenue increased 15 percent.
ITV's stock was up 5.5 percent as of 8:45am London time.
"We have made further progress in reshaping and rebalancing ITV to ensure the business is more robust, both commercially and creatively," ITV CEO Adam Crozier said. "The momentum we are building in our non-net advertising revenues has helped grow group revenues…in difficult economic conditions and with a broadly flat television advertising market."
He added: “ITV Studios has performed strongly as our strategy of investing in the creative pipeline and talent again shows through in our results. We expect ITV Studios to report over £100 million ($160 million) of profit in 2012, and the number of new commissions and recommissions already secured for 2013 gives us confidence that there will continue to be good underlying growth in the studios business."
Highlighting that this year has featured special events, such as the Queen’s Jubilee and the London Olympics, which have affected ITV's performance, Crozier said: "We do not expect our viewing performance in 2012 to impact our advertising share in 2013, and we are focused on growing our share of viewing next year."