Italy's Mediaset Predicts Higher 2011 Net Despite Q1 Drop

Q1 net profit was $98.2 million against forecast of $99.1 million.

Italian broadcaster Mediaset stuck to its forecast for higher 2011 net profit, saying it expected key home advertising sales to improve, despite a weak start to the year, according to Reuters. A sluggish economic recovery is holding back advertising spending in Italy and Spain, where the group controlled by the family of Italian Prime Minister Silvio Berlusconi.

The company said that its first-quarter net profit fell 26 percent to €68.4 million ($98.2 million) compared to forecasts of  €69 million ($99.1 million), as advertising spending slowed and programming costs for its pay TV operations continued to rise.

First-quarter revenues in Italy -- which accounted for about 80 percent of total revenues last year -- fell 6.7 percent from a year earlier, due to a drop in advertising sales on free TV channels.

However, Mediaset said it should be able to meet a forecast for higher advertising revenues in Italy in 2011, thanks to a recovery in the second half of the year.