ITV forecasts a further fall in advertising revenue
Broadcaster ITV has forecast a further fall in advertising revenue because of increasing nervousness about the strength of the economy.
The company behind the X-Factor and Cold Feet said advertising revenue in the three months 30 September was down 4% on the same quarter last year.
But ITV predicted a further 7% fall in the final quarter of 2016 due to "the political and economic uncertainty".
That would see net advertising revenue fall 3% over the full year, ITV said.
"In recent weeks the political and economic uncertainty has increased and we are currently seeing more cautious behaviour by advertisers," ITV said in a trading update.
However, the broadcaster said its recent push to boost other revenue streams, such as with content from its production arm ITV Studios, would help to offset the fall in advertising.
ITV's total revenues rose 5% to £2.16bn, but revenue from non-advertising sources rose 15%, helped by a strong performance from its studio business.
Chief executive Adam Crozier said: "ITV is now a much more balanced and resilient business. Even against the current uncertain economic backdrop, we expect 2016 earnings to be broadly in line with last year."
ITV said advertising revenues fell about 11% in October after a jump in the same month last year when it benefitted from the Rugby World Cup.
Changing viewing habits
The group boosted viewing figures, with the main ITV channel's share of viewing up 3%. Its online viewing jumped 49% year-on-year in the first nine months of 2016.
ITV's share price rose 1% in early trading, which analysts said was probably due to the revenue fall not being as bad as many experts had forecast.
Tamsin Garrity, media analyst at Jefferies, said the figures were "slightly better than our cautious scenario", having pencilled in a drop of more than 8% for the fourth quarter of 2016.
Meanwhile, George Salmon, equity analyst at Hargreaves Lansdown, said: "Given the current economic uncertainty, it may not be much of a surprise to see the group's customers are pulling their horns in, but it is still not good news for the group.
"For the time being, ITV remains the prime place to advertise on a national scale. Coronation Street's status as a national treasure isn't endangered by a weaker economy.
"The challenge for the group now is to retain this premier position as Netflix and others grow in the on-demand sphere. Viewing habits are changing and ITV will have to change with them."