Grupo Televisa S.A.- GDS* (TV): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

By Zacks Investment Research,

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Grupo Televisa reported mixed financial results for the third quarter of 2014. Although the top-line improves year-over-year, the bottom-line fell significantly below the Zacks Consensus Estimate. We believe that the 2013 telecommunications industry reform bill of the Mexican government will affect Televisa positively as well as negatively. Presently, the company controls four free-to-air broadcast channels, two of the largest satellite-based TV channels, and three cable TV units offering triple-play TV, voice and Internet services. A foothold in the lucrative mobile market will make the company a highly integrated broadcasting and telecommunication operator in Mexico. Meanwhile, the stock price has soared nearly 32% in the last year. We, therefore, downgrade our recommendation on Televisa to Neutral.


Grupo Televisa, S.A. (TV), incorporated in 1990, is the largest media company in the Spanish-speaking world. It is a major player in the global entertainment business. Televisa runs four television networks in Mexico with around 260 affiliated stations. The company has interests in TV production, broadcasting, international distribution of television programming, direct-to-home (DTH) satellite services, publishing, music recording, radio production and broadcasting, cable television, professional sports and show business promotions, paging services, and feature film production and distribution. Grupo Televisa also operates a horizontal Internet website,, and has interest in direct-to-home (DTH) satellite services through its 60% stake in Innova, which runs the SKY DTH satellite system. Programs produced by the company include: telenovelas (soap operas), sports, newscasts, sitcoms, game shows, and musical and cultural events, which are broadcasted through its network stations, affiliated stations, and cable systems in Mexico, and through its DTH satellite joint ventures in the Americas and Spain.

Televisa reports in four revenue generating segments:

Content: This segment was created in Jan 1, 2012 and covers all sources of revenues derived from its content businesses, which were earlier divided into TV Broadcasting, pay-TV Networks, Programming Exports, and Online services. The Content segment has three sub- segments, namely, Advertising, Network Subscription and Licensing & Syndication.

Sky: This segment provides direct-to-home broadcast satellite pay-television services in Mexico.

Telecommunications: This segment operates a cable television system in the Mexico City metropolitan area. The segment also provides data and long-distance service solutions to carriers and other telecommunications service providers through its fiber-optic network in Mexico and the U.S.

Other Businesses: This segment offers sports and show business promotion, soccer, feature film production and distribution, Internet, gaming, radio operations, publishing and distribution.

Latest Development in the Mexican Telecommunications Market

The government of Mexico has decided to reform its telecommunications sector, predominantly the wireline and wireless phone segments and the cable and satellite TV segments. The telecommunications sector in Mexico is highly monopolistic with one or two companies dominating the market. The Mexican government, however, intends to increase competition by encouraging the entry other operators. In this regard, regulator Federal Telecommunications Institute, which is popularly known as IFT, identified broadcasting giant Televisa and telecom behemoth America Movil as the dominant players in the respective markets.

Grupo Televisa S.A.- GDS* (TV): Read the Full Research Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Stocks
Referenced Stocks: TV , DTH

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