Mediaset SpA, the broadcaster controlled by former Italian Prime Minister Silvio Berlusconi, advanced the most in more than three weeks in Milan after the company said it would achieve a cost-cutting target ahead of schedule.
Mediaset said yesterday in its earnings statement that it’s confident that it can reach the cost-reduction goal of 450 million euros ($581 million) in its 2012-2014 plan before the end of the period.
“The results achieved in 2012 and the first quarter of 2013 make it possible to hope that the announced reduction in structural costs can be achieved ahead of schedule,” Milan-based Mediaset said in the statement.
The broadcaster rose as much as 5.7 percent to 2.28 euros and was trading at 2.27 euros at 11:35 a.m. in Milan.
“The shares are rising because the market liked the cost-cutting, even if we must be careful about being too enthusiastic,” said Andrea De Vita, an analyst at Banca Akros in Milan.
Mediaset reported a 7.9 percent decline in first-quarter profit on lower advertising sales in Italy. Net income fell to 9.3 million euros from 10.1 million euros a year earlier, the company said. Revenue dropped 15 percent to 831.6 million euros. That compares with an analysts’ estimate of 834.8 million euros, according to data compiled by Bloomberg.
Mediaset is hurt by the weakness of the Italian advertising market, which plunged 19 percent in the first quarter to 1.59 billion euros, according to researcher Nielsen Holdings. Competition with Rupert Murdoch’s pay-TV provider, Sky Italia, has intensified and to counter that challenge, Mediaset has held talks with Qatar’s Al Jazeera and French pay-TV channel Canal+ about forming a partnership.
The company reported its first annual loss in March because of impairment costs of 307.8 million euros.