Investing.com -- Shares of ITV Plc (LON:ITV) were down over 7% on Thursday its third-quarter trading update for the nine months ending September 30, which posted a major revenue impact, especially from ITV Studios.
The broadcaster's group revenue for the period dropped by 8% year-on-year, falling to £2.74 billion, compared to £2.98 billion in 2023.
“ITV Studios Q3 revenue was impacted by the phasing of deliveries and the 2023 US writers’ and actors’ strike,” the company said in a statement.
ITV Studios, in particular, reported a 20% drop in revenue, amounting to £1.22 billion, primarily due to a delay in production deliveries and the lingering effects of the 2023 US writers' and actors' strikes.
These disruptions are expected to push about £80 million of anticipated revenue into 2025, further affecting the company's bottom line.
Despite the challenges faced by ITV Studios, the company remains optimistic about the full-year performance.
It projects that ITV Studios will deliver a record adjusted EBITA, driven by efficiency gains and a strong fourth-quarter delivery schedule.
However, overall revenue from the division is expected to decline by mid-single digits for the full year, though the decrease is marginal when excluding the impact of the strikes.
Meanwhile, ITV’s Media & Entertainment division, which includes its streaming platform ITVX, showed mixed results. The company reported a 4% year-on-year increase in overall M&E revenue, reaching £1.52 billion.
Digital advertising revenue grew by 15%, reflecting the strength of ITVX, which saw a 14% increase in streaming hours and continued growth in monthly active users.
However, non-advertising revenue declined by 7%, in line with expectations. The company also adjusted its forecast for total advertising revenue (TAR), projecting a 2.5% increase for the year, though the fourth quarter is expected to be weaker, down 6-7%, due to tough comparisons with the 2023 Rugby World Cup.
ITV has also taken steps to mitigate the impact of these challenges, announcing an additional £20 million in net cost savings for 2024, £10 million of which will come from content cost reductions.
Despite the downturn in revenue, ITV is on track to meet its target of at least £750 million in digital revenue by 2026.