14 Dec 2016

Sky TV to miss profit forecast as subscribers numbers drop

4:39 pm on 14 December 2016

Sky Television will miss its profit forecast for the full year, as a drop in subscriber numbers drives down revenue.

Westworld

Blockbuster TV shows such as Westworld have not been enough to stop Sky's profit drop. Photo: HBO

The pay television operator's underlying earnings was expected to be five to seven percent below the $296 million forecast it made earlier this year.

It said the revised guidance was based on results to the end of November, with revenues down slightly due to a reduction in subscriber numbers and a change in customer mix.

The underlying profit was also down due to increased content costs, including the rights to broadcast the 2017 America's Cup, Lions Tour to New Zealand and PGA golf, Sky said.

The investments were expected to generate incremental revenue opportunities over time, but were not sufficient to offset the cost increase in the current financial year ending in June, it said.

In the meantime, Sky said it was waiting for approvals on its proposed merger with Vodafone from the Overseas Investment Office and Commerce Commission, which had delayed its decision to 23 February.

The company's share price was down eight percent this afternoon, following the release of the revised forecast.

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