Bloomberg News

CTC Media Falls Most in Eight Weeks as Ad Revenue Declines

November 09, 2011

(Updates with closing price in second paragraph.)

Nov. 9 (Bloomberg) -- CTC Media Inc., the Russian television network listed in the U.S., dropped the most in eight weeks after the company reported a decline in third-quarter profit and cut its revenue growth forecast on a slowdown in demand for advertising.

CTC fell 12 percent, the steepest drop since Sept. 12, to $9.70 at 4:24 p.m. New York time. CTC, based in Moscow, said today that third-quarter net income dropped 33 percent to $16.4 million.

The company reduced its 2011 operating revenue growth forecast to as low as 9 percent from a projection of 20 percent given at its second-quarter earnings conference, citing a slowdown in demand for advertising and the risk of unsold inventory. CTC also reduced its full-year forecast for margins on operating income before depreciation and amortization, reducing it to a range of 31 to 33 percent from a previous range of 34 to 36 percent.

“The downgrade of CTC Media’s forecasts for the year highlight risks to the company’s revenues” in the fourth quarter and in 2012, Uralsib Capital equity analysts including Konstantin Belov said in a note to investors today. While third- quarter results “confirmed the company’s ability to keep costs under control,” there is concern that a slowing economy will curb advertising revenue, they said.

Link to Statement: {NSN LUDYC63PWT1C <GO>}

--Editors: Marie-France Han, David Papadopoulos

To contact the reporter responsible for this story: Ksenia Galouchko in New York at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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