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Televisa Lags 1Q Earnings and Rev

TV CTCM

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Grupo Televisa S.A.B. (TV - Analyst Report) 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 - Snapshot Report), Fisher Communications Inc. and LIN TV Corp. . 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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