GMA Network profits drop in fourth quarter

GMA NETWORK INC., THE COUNTRY’S most profitable broadcast outfit, is suffering from a dramatic drop in earnings in the fourth quarter and will likely post its lowest quarterly profit this year on the back of an industry-wide decline in advertising revenue, its top official said.

GMA 7 president Felipe Gozon said the network could not hope to exceed its profit outlook of P2 billion, although he assured that the target would be met despite the weak fourth quarter.

“The sustained growth in sales and corresponding jump in profits in the fourth quarter that we were expecting didn’t happen,” Gozon said in an interview. “But I believe this is happening to the entire industry, and not unique to us.”

Advertisers, he said, appeared to have front-loaded their budget for the broadcast media. Thus, GMA 7 sales and profits for the first three quarters were robust.

Gozon last month said that profits from January to September stood at about P1.74 billion or 58 percent higher than the P1.09 billion posted in the same period last year. This meant that the network was only P260 million shy of its P2 billion target.

Meeting–not surpassing–the target meant that GMA-7 would book less than half of the profits it had been generating for each quarter this year. In the third quarter alone, it posted net earnings of more than P700 million against the P600 million in the second quarter, and about P400 million in the first three months.

Some advertisers, according to the GMA 7 chief, have already spent all their budgets at the start of the fourth quarter.

inQ7 article by Clarissa S. Batino