* Group ad revenue rises 4.7 pct
* Reiterates forecast for flat full-year sales
* Revenue hurt by comparison with 2010 soccer World Cup
* Shares gain 8.1 pct (Adds comments from conference call)
By Christian Plumb and Gwenaelle Barzic
PARIS, July 26 (Reuters) - France’s biggest broadcaster, TF1 , reported a stronger-than-expected 79 percent rise in first-half operating profit as programming costs fell and group advertising revenue rose.
Shares in TF1 jumped more than 8 percent after it said operating profit climbed to 186.5 million euros ($267 million) and first-half ad revenue rose 4.7 percent to 905.2 million, helped by its TMC digital free-to-air channel and Internet activities.
Analysts had expected, on average, EBIT of 136.5 million euros and net income of 87 million for the first half.
“The consensus was more conservative than these results,” CM-CIC analyst Eric Ravary said in a research note, citing the stabilisation of ad revenue and programming cost savings.
Group sales at TF1, 43 percent owned by French construction-to-media conglomerate Bouygues , dipped 0.5 percent to 1.28 billion euros, hurt by a lack of major sporting events in comparison with last year’s first half, which was boosted by the soccer World Cup.
Revenue from advertising on the TF1 channel fell 0.9 percent in the first half, again hurt by comparison with the World Cup.
TF1 reiterated its full-year forecast for flat consolidated sales, saying the economic climate was still characterised by poor visibility.
But Chief Executive Nonce Paolini said on a conference call that advertising revenue had been “rather good” in July and did not have “particular worries” for the rest of the year.
Shares in TF1 were up 8.1 percent at 13.76 euros by 0950 GMT.
TF1 leads the French TV market but its market share declined to 23.8 percent from 24.8 percent in the year-ago period with growing competition from other free channels.
Asked about speculation that TF1 could move to a free channel model for its LCI all-news channel, Paolini said the market was forcing the free model on news channels.
Expiry is looming for a deal under which Canal Plus operator CanalSat offers LCI as part of its line-up.
If it became free, LCI would compete with two French news channels that are supported exclusively by ad revenue, and some have questioned whether there is room for three such operators.
Paolin said, however, he was sure there was space for LCI as well as BFM TV, owned by NextRadioTV and i-Tele, owned by Canal Plus which in turn is majority owned by Vivendi .
($1 = 0.698 Euros)
Editing by Andrew Callus, Sophie Walker and David Hulmes