* Profit, ad revenue fall less than expected
* Shares surge 9 pct, up 31 pct this year
* Says Q3 ad revenue outlook cloudy
(Adds comment from conference call)
By Christian Plumb
PARIS, July 25 France's biggest private
broadcaster TF1 on Thursday reported a milder than
forecast 17-percent slide in quarterly profit and reiterated a
full-year sales target already reduced to reflect the weak
Its shares surged 9 percent on relief that its 48.4 million
euro ($64.06 million) second-quarter profit - as well as a 5
percent drop in second quarter advertising revenue - were ahead
Still, Finance Director Philippe Denery acknowledged on a
call with analysts that with regard to third-quarter advertising
revenue there was "neither an improvement nor a deterioration
for the moment but in any case visibility remains weak."
TF1, which held its forecast for full-year revenues of 2.5
billion euros, said it generated 9 million euros in recurring
savings under a cost-cutting plan, bringing the total to 31
million since June 30, 2012. The group is targeting 85 million
in recurrent savings by the end of 2014.
It is also "bringing in specific measures intended to
generate further savings in 2013" although Denery and CEO Nonce
Paolini declined to elaborate on the conference call.
"Each time they mention anything on cost savings it's
received quite well," Liberum analyst Lisa Hau said, noting that
her firm nonetheless has a "sell" rating on the stock given the
company's struggles with competitive pricing.
She calculated advertising revenue was declining more
rapidly than than at rival broadcaster M6, which earlier this
week reported a quarterly drop of just 0.6 percent, while
acknowledging the environment remained difficult.
TF1 shares are up 31 percent so far this year, helped by
optimism that margins could be further boosted by cost cuts as
well as European court ruling that means private broadcasters
will not have to compete with public stations for scarce
They have outperformed France's benchmark CAC-40 index
, up 8 percent, while rival M6 has gained 20 percent so
far this year.
($1 = 0.7555 euros)
(Reporting By Christian Plumb; editing by Mark John)