Net income fell to 294 million kronor ($45 million), or 4.33 kronor a share, from 520 million kronor, or 7.78 kronor, a year earlier, the Stockholm-based company said today in a statement. Analysts had predicted earnings of 270 million kronor, the average of nine estimates compiled by Bloomberg.
Modern Times Group, which has expanded in the Czech Republic, Russia and Slovenia, is exploring additional purchases in Eastern Europe and Africa. The owner of the TV3 television channel and TV1000 pay-TV channel raised its financial targets in June and forecast revenue will be 20 billion kronor in 2011.
``It was better than expected,'' said Henrik Froejd, an analyst at Kaupthing Bank in Stockholm with a ``buy'' recommendation on the stock. ``After a few weaker reports we're now entering a profit-growth period. They are sending positive signals about the future.''
Modern Times shares rose 24 kronor, or 6.1 percent, their biggest gain since October 2006, to close at 419.50 kronor in Helsinki.
``We feel very comfortable'' about reaching the company's five-year strategic goals, Chief Executive Officer Hans-Holger Albrecht said in an interview. Regarding further expansion of the business ``Eastern Europe is a primary focus. We also have people running around in Africa. I would be surprised if we wouldn't announce a deal within six to nine months.''
Profit in the year-earlier quarter included a 241 million- krona gain from the initial public offering of CTC Media Inc., in which Modern Times Group owns about 40 percent. Sales rose 15 percent to 2.61 billion kronor. Analysts had anticipated revenue of 2.52 billion kronor.
At the Scandinavian free-TV division, sales in the period rose 3 percent, while operating earnings jumped 25 percent, Modern Times Group said. Operating profit at the pay-TV division fell 3 percent to 153 million kronor, while sales gained 13 percent to 909 million kronor.
``At this stage it looks pretty similar to the third quarter,'' Albrecht said about the ad market in the fourth quarter. He declined to give any projection for next year due to ``very short visibility.''
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