German market analysts have been caught unawares by Senator Entertainment's profit warning for the financial year 2001 - reducing its targetted revenues from Euros 197.1m to Euros 125m-130m and its EBIT from Euros 40m to Euros 2m-5m.

As Markus Wallner and Marc Roehder of HSBC Trinkaus & Burkhardt observed, "the profit warning was very surprising due to the fact that the company confirmed its old targets in October and also confirmed that they were in final negotiations with three TV broadcasters on selling movie licences for Euros 40-50m".

However, it was clear that revenues would be lower after the company decided to postpone a number of releases until 2002 - such as The Others with Nicole Kidman - because of the anticipated dominant presence of Harry Potter and Lord Of The Rings in the German cinemas in the final weeks of the year. In addition, Senator reports that the first films from the Joe Roth Revolution deal have "not achieved the expected box office results".

Consequently, the HSBC analysts have put the Senator share "under review", while the Landesbank Baden-Wuerttemberg (LBBW) revised its rating from "Buy" to "Reduce" following publication of the profit warning..

At the same time, the producer-distributor's nine-month figures were in line with many analysts' estimates and even above the HSBC team's estimates: compared to the same period in 2000, sales increased by 74.8% to Euros 115.9m and the EBITDA by 128.1% to Euros 83.7m.

At the beginning of trading on Friday morning, Senator's share slipped by more than 15% to Euros 3.28.