Television Broadcasts (TVB) shares dropped sharply yesterday after the company's interim results disappointed the market. The broadcaster slumped 18.77 per cent to close HK$5.20 off at $22.50 after reporting a lower than expected net profit of $247.18 million for the six months to June that was up 11.9 per cent from a year earlier. The counter fell as much as 21.11 per cent in intraday trade to $21.85 - the lowest level since February 1999. TVB was also the biggest blue-chip loser on a turnover of $93.86 million. Sources said United States-based fund house Janus, which holds 36 million TVB shares, sold three million to four million shares yesterday. Brokerage firms downgraded their earnings forecasts and recommendations, expecting a further slowdown in advertising revenue in the second half. ABN Amro now expects zero growth in TVB's core business for the full year. Credit Suisse First Boston revised its outlook on advertising revenue to a full-year contraction of 2 per cent - down from the previous zero growth. The brokerage houses are also surprised by the widening loss of the overseas operations to $38.25 million in the first half. Goldman Sachs estimated that TVB had about 60,000 of the 100,000 subscribers it needed to achieve profitability on the global satellite-television business. Merrill Lynch believed the commitment to roll out pay-television services - Galaxy Satellite Broadcasting - remained as the biggest concern. The brokerage house believed that should TVB push ahead with Galaxy, the burden related to $5 billion capital expenses and competition in the marketplace would probably depress the company's earnings for year to come, and possibly its share price as well. Merrill Lynch is also concerned about the possible impact of AOL Time Warner and News Corp's entry into the Guangdong broadcasting market. It said it was logical for TVB to obtain similar rights in the future.