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Grupo Televisa (TV) Q3 Earnings Lag, Revenues Improve Y/Y

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Mexican pay-TV and broadcasting behemoth Grupo Televisa S.A.B. TV reported mixed financial results in the third quarter of 2016. While the bottom line lagged the Zacks Consensus Estimate, the top line improved on a year-over-year basis.

Net income in the reported quarter came in at approximately $70.8 million, down 79.6% year over year. However, earnings per Global Depository Shares (GDS) were 12 cents, lagging the Zacks Consensus Estimate of 20 cents. However, net revenue of $1,216.26 million in the reported quarter rose 6.6% year over year.

Operating income was $226.31 million, down 4.3% from the prior-year quarter. Operating margin was 18.6% compared with 20.7% in the year-ago quarter. Corporate expenditure, during the reported quarter, was approximately $26.56 million, up 4.4% year over year.

At the end of the third quarter of 2016, Televisa had approximately $2,350.6 million of cash and cash equivalents and $6,243.57 million of total debt compared with $2,532.63 million and $5,660.86 million, respectively, at the end of 2015. At the end of the reported quarter, the debt-to-capitalization ratio was around 0.42 compared with 0.39 at the end of 2015.

Content Segment

Content Segment revenues came in at $444.84 million, up 0.6% year over year. Operating profit was $186.76 million, down 9.4% year over year, while operating margin was 42.0%.

Within this segment, Advertising revenues totaled $276.76 million, down 1.5% year over year. Network Subscription revenues were $57.7 million, indicating an increase of 20.4% year over year. Licensing and Syndication revenues were $110.36 million, down 2.6% year over year.  

Sky Segment

Sky segment revenues came in at $282.29 million, up 12.5% year over year. Operating profit was $129.92 million, up 8.7% year over year. Quarterly operating margin was 46.0%, down 160 basis points (bps) from the year-ago quarter.

Cable Segment

Cable segment revenues of $418.12 million increased 11.8% year over year. Operating profit was $176.54 million, up 15.8% year over year. Operating margin expanded to 42.2% which shows an increase of 140 bps from the same quarter last year.

Other Businesses Segment

Other Business revenues were $114.11 million, up 10.8% year over year. Operating income was $18.41 million, up a substantial 39% year over year. Operating margin was 16.1%.

Subscriber Statistics

As of Sep 30, 2016, Televisa had 4,240,935 Video subscribers; 3,346,060 Broadband Internet subscribers; and 2,092,293 Telephony subscribers, which together constituted 9,679,288revenue generating units (RGU) in the Telecommunications segment. At the Sky segment, the number of net active subscribers increased by 123,064 during the quarter to 7,926,678 as of Sep 30, 2016, of which 205,541 are in Central America and the Dominican Republic compared with 7,053,731 as of Sep 30, 2015.

Recent Developments

Recently, Televisa the signing of content distribution deals with NBCUniversal International Distribution and its Spanish-language unit – Telemundo – for Mexico and Latin America customers. This deal should help Televisa extend its existing contract for free-to-air television and includes a pack of movies for pay TV channels Golden Premier and Golden (Televisa Networks) and content for its streaming video platform Blim, which competes with the likes of Netflix Inc. NFLX.

GRUPO TELEVISA Price, Consensus and EPS Surprise

 

GRUPO TELEVISA Price, Consensus and EPS Surprise | GRUPO TELEVISA Quote

Zacks Rank & Stocks to Consider

Televisa currently carries a Zacks Rank #3 (Hold). Here are some companies that have the right combination of elements to post an earnings beat this quarter.

Verizon Communications Inc. (VZ - Free Report) , with an earnings ESP of +1.11% and a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters.

Microsoft Corporation MSFT, with an earnings ESP of +1.30% and a Zacks Rank #3 (Hold).The company’s earnings surpassed the Zacks Consensus Estimate in three of the previous four quarters.

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