Televisa Lags 1Q Earnings and Rev

Zacks

Grupo Televisa S.A.B. (TV) reported disappointing financial results for the first quarter of 2013, missing the Zacks Consensus Estimate. Net income was approximately $125.1 million, down 21.6% year over year. Earnings per Global Depository Shares were 16 cents, well below the Zacks Consensus Estimate of 20 cents. Quarterly consolidated net revenue of around $1,266.4 million improved 2.4% over the prior-year quarter but fell below the Zacks Consensus Estimate of $1,347 million.

Gross margin was 42.1% compared with 42.8% in the year-ago quarter. Consolidated operating income was $276.7 million, up 3.2% from the prior-year quarter. Operating margin was 21.9% compared with 21.7% in the year-ago quarter. Capital expenditure, during the reported quarter was $14.5 million.

 At the end of the first-quarter 2013, Televisa had approximately $1,946.4 million in cash and marketable securities and $4,240.4 million of outstanding debt compared with $1,892 million of cash and marketable securities and $4,112.1 million of outstanding debt at the end of 2012. At the end of the reported quarter, the debt-to-capitalization ratio was around 0.42 compared with 0.43 at the end of 2012.

Content Segment

Quarterly total revenue was $518 million, down 1.9% year over year. Operating profit was $194.1 million, down 8.4% year over year, and operating margin was 37.5% compared with 40.1% in the year-ago quarter. Quarterly royalty from Univision was a record-high $57.3 million, up 7.2% year over year.  

Within this segment, Advertising revenues were $343.4 million, down 7.2% year over year. Network Subscription revenues were $71.1 million, up 17.3% year over year. Licensing and Syndication revenues were $103.6 million, up 6.3% year over year.  

Publishing Segment

Quarterly revenues were $54.4 million, down 4.2% year over year. Operating profit was $0.1 million, down 96.5% year over year, and operating margin was 0.2% compared with 4.8% in the year-ago quarter.

Sky Segment

Quarterly revenues came in at $312.3 million, up 13% year over year. Operating profit was $144.3 million, up 12.5% year over year. Quarterly operating margin was 46.2% compared with 46.4% in the year-ago quarter.

Cable and Telecom Segment

Quarterly revenues were $324.5 million, up 5.4% year over year. Operating profit was $115.7 million, up 6.6% year over year. Operating margin came in at 35.7% compared with 35.3% in the year-ago quarter.

Other Businesses Segment

Quarterly revenues were $81.2 million, down 10.9% year over year. Operating income was $8.9 million, up 3.4% year over year. Operating margin was 11% compared with 9.5% in the year-ago quarter.

Subscriber Statistics

As of Mar 31, 2013, Televisa had 2,364,259 Video subscribers; 1,384,685 Internet Broadband subscribers; and 784,882 Telephony subscribers, which together constitutes 4,533,826 revenue generating units (:RGU) in the Cable and Telecom segment. The company also had 5,413,012 net active Satellite TV subscribers, up 6.1% year over year. In the reported quarter, Sky segment added 259,567 net active subscribers.

Other Stocks to Consider

Televisa currently has a Zacks Rank #4 (Sell). However, there are other stocks that are doing well in this industry. Some of them include CTC Media Inc. (CTCM), Fisher Communications Inc. (FSCI) and LIN TV Corp. (TVL). While CTC Media and Fisher Communications currently have a Zacks Rank #1 (Strong Buy), LIN TV carries a Zacks Rank #2 (Buy).

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