Nine lowers earnings forecasts after decline in TV advertising revenue

Nine Entertainment shares have dropped by more than seven per cent after the media network flagged a lower first-half result on a decline in capital city free-to-air TV advertising.

Chief executive Hugh Marks told Nine's annual general meeting today that TV ad revenue fell by 6.4 per cent in the first quarter, while he also signalled a second-quarter drop by at least as much again.

Nine said its radio division had also experienced soft market conditions - exacerbated for Macquarie Radio by the advertiser boycott around the Alan Jones program on 2GB.

Shares in Nine were 7.05 per cent lower at $1.715 after the first 15 minutes of trade today, having earlier equalled the six-month low of $1.705 last hit in August.

Shares were still 5.15 per cent lower at $1.75 by 11.35am.

Mr Marks said signs of a hoped-for second-quarter improvement had dissipated and that the entertainment conglomerate expects the overall metro free-to-air market to decline by mid-single digits across the full year.

"There was always going to be a shift in earnings contribution in this financial year due to timing issues, particularly the one-off costs in the TV business - however, the current advertising market conditions will mean that our first half result is now expected to be approximately 10 per cent down on pcp (prior corresponding period)," Mr Marks said.

Mr Marks said weak consumer sentiment was driving poor trading conditions for many consumer-facing businesses and, as such, general softness in the overall advertising market.

For Nine, advertising from nearly every major category was weak in the September quarter, particularly from auto, government, domestic banks and gambling.

Mr Marks said the overall second half result would pick up on Nine's expected growth in linear free-to-air share and further growth at its 9Now catch-up TV service.

Meanwhile, the company said digital streaming service Stan had been profitable in both earnings and cash flow in every month since March, putting it on track for a positive full-year contribution.

Nine declined to detail the overall cost of the Alan Jones boycott, or how many advertisers had pulled out, after the broadcaster suggested Prime Minister Scott Morrison "shove a sock down the throat" of New Zealand counterpart Jacinda Ardern in August.

"Alan is still supported by an enormous audience, he topped the ratings," chairman Peter Costello said.

"The owners and the station have to make sure he is within the laws of defamation and common decency."

The company's remuneration report received 99.5 per cent of proxy votes in favour, meaning it is almost certain to be passed.