Sky Network Television shares dropped after New Zealand's biggest pay-TV company gave guidance for 2012 earnings that lagged behind analyst estimates while capital spending will be higher than expected.
Sky TV shares dropped 4.4 percent to $5.40, the biggest decline on the NZX 50 Index today. The stock has gained 6.7 percent in the past 12 months and is rated 'outperform' based on eight recommendations compiled by Reuters.
Profit is likely to be between $120 million to $125 million in the 12 months ending June 30, 2012, the company said in a presentation to shareholders at their annual meeting today. Profit last year was $120 million and analysts had a mean forecast of $347 million for the current year.
Capital expenditure will range from $150 million to $160 million, above the analyst estimate of $123 million. Spending includes the cost of 140,000 MYSKY units and other costs include adding new channels, marketing and transponders.
MYSKY subscribers jumped to 279,875 in 2011 from 189,975 in the previous year. The company said it expected to meet the market's forecast for 860,000 subscribers this year, up from 829,000 in financial 2011.
Chief executive John Fellet told shareholders at the meeting that viewer numbers for the Rugby World Cup quarter finals and semi finals were 48 percent above budget and he had high hopes for the sell-out final match this weekend between the All Blacks and France.