ROME -(Dow Jones)- Mediaset SpA (MS.MI), Italy's largest private broadcaster, Tuesday confirmed its forecasts for declining profits for 2012 after posting a sharp drop in its first-quarter net profit due to a continued fall in advertising revenue in its home market.
The broadcaster, owned by the family of former Prime Minister Silvio Berlusconi, said it expects this year's consolidated net profit and cash generation to be lower than last year's unless market conditions improve.
For the first three months of the year, the group posted a net profit of EUR10.3 million from EUR68.4 million in the same period a year earlier. Analysts had forecast a net profit of EUR23.3 million.
Revenue fell to EUR977.8 million from EUR1.1 billion as gross advertising spending declined by 10% in Italy.
Mediaset is battling with News Corp.'s (NWS) satellite unit Sky Italia in the fast-growing Italian pay-TV market, as it struggles to defend its dominant position in the free-to-air TV sector.
The broadcaster is facing a shrinking audience for its free-to-air channels, as well as dwindling advertising revenue in a stagnant economy.
News Corp. owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal.
-By Giada Zampano, Dow Jones Newswires; +39 06 69766920; giada.zampano@dowjones.com
-0-
(MORE TO FOLLOW) Dow Jones Newswires
May 08, 2012 12:52 ET (16:52 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.