Music and film giant PolyGram yesterday shocked the City with news that its 1995 full-year earnings would be flat following disappointing box- office returns and delays in new album releases.
At least one firm, Warburg, downgraded the stock to a hold, while several analysts revised estimates sharply downward.
The shares lost 10 guilders in Amsterdam to trade as low as 70 guilders, beforing recovering to close at 72.8 (pounds 29.40).
Company chief executive Alain Levy, credited with PolyGram's robust growth in recent years, said "any creative company has seasonal set-backs - we have had a cold spell in the second half."
PolyGram has averaged annual profit growth of 20 per cent since 1990, while growth between the second half of 1993 and the second half of 1994 was more than 23 per cent.
Last year, the company made 738m guilders on turnover of 8.6bn guilders. In the first half of 1995, sales totaled 4bn guilders, while net income rose 20 per cent like for like to 270m guilders.
Analysts said the absence of a runaway film hit in 1995, to match the success of last year's Four Weddings and a Funeral, helped explain the lacklustre profit performance. So far this year, the company's biggest box-office hits have been French Kiss, Nell, Usual Suspects, Shallow Grave and Carrington.
On the music front, where Mr Levy has been particularly successful in the past, sales of new releases have been disappointing in the crucial run-up to Christmas. Only the Janet Jackson Hits album has managed solid sales - although far short of 1994's Bon Jovi title (8 million in sales), Boyz II Men (8 million) and The Cranberries (4 million.)
A PolyGram spokesperson said that the 1996 release schedule was promising, and included new albums from Bryan Adams, The Cranberries, Sheryl Crow, Sting and U2.
The film division, where the company has focused increasing management attention, could improve in 1996, according to leisure analysts. Sleepers, the well-reviewed new Brad Pitt movie, and Dead Man Walking, starring Sean Penn, are among the likely hits.Reuse content