Sky Network Television disappointed the market with its outlook for the 2013 financial year.
After the announcement, the company suffered the same fate as Telecom, with investors yesterday selling off shares. The shares fell 3.2% in value to $5.08.
The stock is rated "outperform", based on the consensus of 10 recommendations compiled by Reuters, with a price target of $5.58.
The company reported operating earnings of $336 million for the year ended June, up 4.5% on the previous corresponding period and just below consensus estimates.
Revenue was up 5.8% at $843 million. The reported profit was $122.8 million, up 2%. Reported profit of $122.8 million on sales of $852.3 million was forecast, based on the consensus of analysts.
However, it was the guidance that disappointed the market, Craigs Investment Partners broker Chris Timms said.
Sky TV forecast operating earnings of $335 million to $340 million, versus Craigs' estimate of $356 million and a consensus of $359 million.
"The revision essentially relates entirely to one-off costs associated with the Olympics and delayed Igloo launch and so the flow-on impact on the 2014 financial year should be relatively low," Mr Timms said.
A final dividend of 11c per share will be paid, taking the total dividend to 22 cents per share.
"When questioned on special dividends, management noted it received ongoing attention by the board and while they have decided to keep their powder dry a bit longer, it doesn't necessarily mean they have to wait six months until the first-half 2013 result," Mr Timms said.
Sky TV's share of total television viewing in New Zealand had risen to 29.8% from 27.9% and it lifted total subscribers by 17,510 to 846,931 in the latest year. The churn rate, which measures the percentage of subscribers who depart, edged up to an annual 14.2% from 14%.
Figures from the company showed the free-to-air channel Prime, which Sky TV acquired in 2006, increased its share of audience over the age of 5 to 5.8% at June 30 from 4.9% a year earlier.
That channel's advertising sales fell to $23.3 million in the latest year from $23.7 million.
Unlike exporters, Sky TV benefits from a higher New Zealand dollar as most of its programming and equipment costs are in US dollars.
