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By Manon Jacob
Aug 31 (Reuters) - Broadcasting systems provider EVS trimmed its 2017 revenue guidance on Thursday after second-quarter results hit by customer caution in its fast-changing sector, sending the Belgian company’s shares down almost 14 percent.
The broadcast equipment industry has faced challenges on several fronts, with the struggle to accelerate the transition to digital networks coming against the backdrop of a media landscape made more competitive by the growth of new entrants such as Netflix.
EVS, which makes both hardware and software, shaved its revenue guidance to between 115 million euros ($136 million) and 125 million euros, from 115-130 million euros announced in May.
“New digital players and uncertainties generated by this changing environment keep customers cautious with their investments,” EVS said.
The biggest challenge remains the transition to new network technologies, said Geoffroy d’Oultremont, deputy manager of investor relations at EVS.
“There is a need for a complete redesign of the way we work in the industry. Clients must pick up new formats and we are looking to accelerate the development of products to ensure new growth drivers in the longer term,” he said.
Broadcast engineers are also indirectly affected by the pressure of cuts in advertising budgets and big media clients’ stretched finances as they contend with the growing competition from the likes of Netflix.
“It’s a whole sector trend, peers like Belden , Harmonic and Avid were also quite negative when they reported in August,” said ING analyst Emmanuel Carlier.
EVS reported second-quarter operating income of 7.9 million euros and net profit of 5.5 million euros, both down by more than 50 percent from a year ago. ($1 = 0.8453 euros) (Reporting by Manon Jacob; Editing by David Goodman)