BERLIN — ProSiebenSat.1 saw its share price plunge more than 13% Wednesday after lowering its earnings forecast for the year.
The pan-European broadcaster said it would no longer reach its original target, which it had predicted would be on par with last year’s E783 million ($1.15 billion), and was now expecting gross profit (before interest, taxes, depreciation and amortization) of between $980 million and $1 billion.
Company execs put the blame on a shortfall in German TV ad sales.
“After a good start in July and August, the trading situation in September and early data for October indicate that the performance of the German free TV business will be below expectations in the second half of 2008,” the company said in a statement.
The group’s share price fell more than 13% before settling at around $7.35.
ProSiebenSat.1’s poor performance is primarily due to the continuing impact of the implementation of a new ad sales model introduced this year as well as to deteriorating conditions in the German economy, the group added.
The broadcaster’s bottom line has been hit hard by an ad sales fiasco suffered last year in Germany when the Federal Cartel Office slapped the company with punitive fines for anti-competitive practices linked to ad rebates provided to clients, which forced it to come up with a new, less lucrative model.
ProSiebenSat.1’s outgoing CEO Guillaume de Posch blamed that ad sales debacle for the group’s 60% drop in net profit in the first half of the year.