* Sees slight decline in Q1 underlying revenue
* FY operating profit slightly ahead of expectations
* 2012 core op profit up 3.5 percent to 602.2 mln euros
* Shares trim recent gains, up almost 17 pct this year
(adds share decline, recasts)
By Leila Abboud
PARIS, March 7 Outdoor advertising specialist
JCDecaux predicted a small fall in first-quarter
underlying revenue due to weak European markets, after posting
full-year operating profit slightly ahead of expectations.
The family-owned company, which competes with Clear Channel
Outdoor and CBS Outdoor, sounded cautious on
sales for January and February, echoing what ad agency Publicis
said would be a "choppy" year with a weak European
economy injecting uncertainty into companies' marketing budgets.
JCDecaux shares dropped 8 percent at the opening of trading
in Paris before recovering to be down 2.2 percent at 0943 GMT.
One trader attributed the drop to investors cashing in after
the stock's 17 percent rise since the start of the year. The
price is up 32 percent since October, while the Stoxx Europe
media and advertising sector index is up 14 percent.
UBS analyst Alastair Reid wrote that management was being
careful not to over promise in the current economic climate.
"As we saw in Q412, management are likely to be erring on
the conservative side, with scope to modestly out-perform
guidance," he said.
Outdoor advertising has been a relatively protected niche in
the marketing industry in recent years, avoiding the declines
that hit print and TV ads during economic downturns.
With more people living in cities, JC Decaux has expanded
its business in emerging markets like China and Russia, both
through small acquisitions and organic growth.
The family owners have long said they would be interested in
acquisitions to grow the group's U.S. business, and analysts see
a bid for CBS Outdoor as one possibility.
JCDecaux posted core operating profit up 3.5 percent to
602.2 million euros ($783 million) last year boosted by growth
in its transport unit, which puts ads in train stations and
Net income before impairment charges fell 2.4 percent to
207.3 million euros because of weakness at JCDecaux's largest
business of making street furniture such as lamp posts and bus
stops for cities and towns in exchange for ad space.
Including an impairment charge from a lower valuation of its
European billboard business, net profit fell 23 percent to 162.8
Analysts were expecting operating profits of 573.8 million
euros and net income of 215.6 million euros, according to
Thomson Reuters I/B/E/S.
"We believe we are well positioned to outperform the
advertising market and increase our leadership position in the
outdoor advertising industry," said Jean-Charles Decaux,
chairman and co-chief executive.
"The strength of our balance sheet is a key competitive
advantage that will allow us to pursue further external growth
opportunities as they arise."
In January, JCDecaux said annual revenues rose 1.5 percent
to 2.62 billion euros on a like-for-like basis in 2012, helped
by outperformance at the transport business.
It generated free cash flow of 322.7 million euros, up 15
percent from a year earlier, and proposed to pay a stable
dividend of 0.44 euros per share.
Publicis' ZenithOptimedia forecasting unit predicted in
December that global ad sales would rise 4.1 percent this year,
while WPP the world's biggest advertising company,
recently nudged up its revenue guidance to 3 percent growth.
As in previous years, the United States and emerging markets
are expected to outpace Europe in ad sales, especially since
there are fewer special events like the Olympics and European
soccer championships this year to boost demand in Europe.
($1 = 0.7692 euros)
(Editing by Christian Plumb and Mark Potter)