ITV Full-Year Profit Beats Estimates on TV Advertising Rebound, Cost Cuts
ITV jumped 9.3 percent to 93.45 pence. Net income for 2010 advanced to 269 million pounds ($437 million), or 6.9 pence a share, from 91 million pounds, or 2.3 pence, the London-based company said in a statement today. Revenue rose 10 percent to 2.06 billion pounds. Analysts in a Bloomberg survey had estimated sales of 2.07 billion pounds and profit of 169.6 million pounds.
The company reported “earnings per share 14 percent above our forecasts, driven higher by broadcasting/online profitability and lower net interest,” Omar Sheikh, an analyst at Credit Suisse, said in a note today. ITV’s net debt at 188 million pounds was lower than Credit Suisse’s estimate of 304 million pounds, he said.
ITV, whose shows include “Britain’s Got Talent” and “X Factor,” said it will pay its first dividend since January 2009. The company said a recovery of the ad market was “very helpful,” and it’s continuing to invest in technology and online operations, as well as creating more content, to protect itself against future volatile advertising.
“We remain cautious and will continue to plan prudently, in terms of the economic outlook and its impact on the TV advertising market,” Chief Executive Adam Crozier said in the statement. First-quarter revenue from TV advertising should rise by 12 percent, while initial forecasts are for April to be 8 percent to 12 percent higher, he said. “The outlook into the rest of 2011 remains uncertain.”
Comparatives will become increasingly difficult as this year progresses and benefits of last year’s soccer World Cup are absent, he said. ITV cut 40 million pounds of costs in 2010, and will trim a further 15 million pounds this year, Crozier said.
ITV, which receives about 70 percent of its revenue from advertising, aims to get half from other sources within five years, the company said in a plan announced last year.
Crozier, who joined ITV last April, is seeking to boost revenue from pay-TV and is also investing in the company’s website. The company plans to spend 25 million pounds this year on online, content and digital channels, today’s statement said.
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