As
expected, the Ten Network today reported lower revenues and earnings in the first
quarter to the end of November. That
was suggested six weeks ago with the release of the company’s final profit
figures for 2005 when management warned that first half revenues and earnings
would not top the record figures for the first quarter of
2005.

Executive chairman Nick Falloon told the company’s annual meeting in Sydney that revenue in the
first quarter fell 2.4% to $295 million, while earning for the group fell 9.5% to $127 million
on an earnings before interest, tax, depreciation and
amortisation basis – the announcement is here. He
didn’t break out the main drivers for the lower revenues and profits but the Ten
TV Network is the most likely culprit as it provides the overwhelming majority
of the company’s revenues and profits.

Mr Falloon said the company’s costs would be held to no more
than 5% growth this year while cost growth in the quarter was around 3% with the
gross profit margin “in the mid 40% range.” That
would be a small rise on the 37.6% experienced towards the end of the 2005
financial year.

Even
though the revenue and earnings softness were signalled, Mr Falloon said they were still the second highest figures in
Ten’s history (the November quarter is Ten’s peak revenue and profit time).
Investors had forgotten about the warning because he sold the shares down 10c
after the announcement to $3.24 by around 11.15am.