(Adds shares, analyst)
PARIS, May 5 (Reuters) - French broadcaster M6 said its annual operating profit would fall if the advertising market continued to decline in the second half of the year, sending its shares down more than 4 percent on Monday.
The country’s second-largest private broadcaster behind TF1 also reported a sharp drop in first-quarter operating profit in part because of weak demand for advertising in what it called a “morose” economic environment.
M6 posted a 2 percent decline in first-quarter advertising revenue to 195.8 million euros ($271.5 million), worse than the 0.4 percent drop in ad sales seen by TF1.
Operating profit fell 31 percent to 41.8 million euros, hurt by what the broadcaster said was different timing of programming costs, lower ad sales and weak results of Bordeaux’s soccer team.
“The problem is not really the fall in advertising revenue, which the market expected, but rather the lack of visibility for the rest of the year,” said one Paris-based fund manager.
“M6 will struggle this year, and the fall in the share price reflects that.”
Overall first-quarter revenue, which also includes sales from direct marketing activities and the Bordeaux soccer team, remained stable in the quarter at 312.2 million euros.
Shares in M6 have fallen 9.7 percent since January and traded at 15.03 euros at 1015 GMT. Shares in rival TF1 are down 9 percent, while the European media index is down 4.6 percent.
M6 is holding an annual shareholder meeting at 1300 GMT during which management may speak more about the outlook for the year.
$1 = 0.7212 Euros Reporting by Leila Abboud, Gwenaelle Barzic, and Alexandre Boksenbaum-Granier; Editing by David Goodman and Mark Potter