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Grupo Televisa (TV) Misses Q1 Earnings, Revenue Estimates

Mexican pay-TV and broadcasting behemoth Grupo Televisa S.A. TV reported weak financial results in the first quarter of 2016. Both the top and the bottom line lagged the respective Zacks Consensus Estimate.

Net income in the reported quarter came in at approximately $56.8 million, down a substantial 45.6% year over year. Quarterly earnings per Global Depository Shares (GDS) were 1 cent, significantly below the Zacks Consensus Estimate of 6 cents.

Consolidated net revenue of around $1,258 million in the reported quarter improved 9.5% over the prior-year quarter but failed to meet the Zacks Consensus Estimate of $1,282 million.

Gross margin came in at 44.1% compared with 43.9% in the year-ago quarter. Consolidated operating income was $191.4 million, plunging 31.2% from the prior-year quarter. Operating margin was 15.2% compared with 24.2% in the year-ago quarter. Capital expenditure, during the reported quarter, was approximately $330.7 million.

At the end of 2015, Televisa had approximately $3,435 million in cash and marketable securities and $6,632.5 million of outstanding debt compared with $3,174.2 million of cash and marketable securities and $6,472.5 million of outstanding debt at the end of 2015. At the end of the reported quarter, the debt-to-capitalization ratio was around 0.54 against 0.52 at the end of 2015.

Content Segment

Content Segment revenues came in at $435.3 million, up 7.2% year over year. Operating profit was $153.6 million, up 1.8% year over year, while operating margin was 35.3% compared with 37.2% in the year-ago quarter. Quarterly royalty from Univision was $70.7 million, up 7.7% year over year.  

Within this segment, Advertising revenues totaled $259 million, down 3.1% year over year. Network Subscription revenues were $62.3 million, indicating an increase of 31.2% year over year. Licensing and Syndication revenues were $113.9 million, up 25% year over year.  

Sky Segment

Sky segment revenues came in at $309.4 million, up 15.7% year over year. Operating profit was $139.4 million, up 12.1% year over year. Quarterly operating margin was 45% compared with 46.5% in the year-ago quarter.

Cable Segment

Cable segment revenues of $440.8 million increased 13.5% year over year. Operating profit was $182.3 million, up 18.6% year over year. Operating margin came in at 41.4% compared with 39.6% in the year-ago quarter.

Other Businesses Segment

Other Business revenues were $102.7 million, down 7.5% year over year. Operating income was $8.2 million, down a substantial 36.1% year over year. Operating margin was 8% down from 11.6% in the year-ago quarter.

Subscriber Statistics

As of Mar 31, 2016, Televisa had 4,153,300 Video subscribers; 3,147,286 Broadband Internet subscribers; and 1,968,590 Telephony subscribers, which together constituted 9,269,176 revenue generating units (RGU) in the Telecommunications segment. The company also had 7,682,379 net active Satellite TV subscribers, up 13.7% year over year. In the reported quarter, the Sky segment added 398,217 net active subscribers.

Zacks Rank and Stock to Consider

Televisa currently holds a Zacks Rank #4 (Sell). Some better-ranked stocks in the same industry include Cumulus Media Inc. CMLS, Gray Television Inc. GTN and AMC Networks Inc. AMCX. While Cumulus and Gray aport a Zacks Rank #1 (Strong Buy), AMC Networks carries a Zacks Rank #2 (Buy).

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GRUPO TELEVISA (TV): Free Stock Analysis Report
 
CUMULUS MEDIA (CMLS): Free Stock Analysis Report
 
GRAY TELEVSN (GTN): Free Stock Analysis Report
 
AMC NETWORKS- A (AMCX): Free Stock Analysis Report
 
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