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Analyst Lowers Earnings Outlook On Sluggish Ad Sales Growth

Citing weaker ratings and a softer scatter market, a top analyst is lowering his estimates for TV advertising spending in the fourth quarter, and warns that except for NBC with the Olympics, things won’t get better in the first quarter.

Michael Nathanson of MoffettNathanson now estimates that TV spending grew 4.7% in the fourth quarter, compared with his earlier forecast of 5.9% growth.

With revenues growing slower, Nathanson is also lowering his earnings estimates for most of the TV companies he follows. Taking the biggest hit is AMC Networks—14% lower earnings per share than previously forecast.

Is the slower ad spending growth a sign of a longer-term trend of advertisers moving marketing dollars to other media? “While it may be too early to primarily blame this quarter’s weakness in advertising on incremental dollars shifting away from television into online and mobile advertising, we think this is an important trend to monitor,” Nathanson says.