Driven by strong growth of its pay-TV services,
Grupo Televisa S.A.B.
) handily beats the Zacks Consensus Estimates in the third
quarter of 2012. Quarterly consolidated net income was
approximately $222 million, up by a considerable 41.5% year over
year. The annualized upsurge primarily resulted from an increase
in the top line and a significant reduction of financing costs.
Third-quarter earnings per Global Depository Shares were 39
cents, well above the Zacks Consensus Estimate of 33 cents.
Quarterly consolidated net revenue of around $1,347 million
was an improvement of 8.7% over the prior-year quarter and
exactly in line with the Zacks Consensus Estimate. Except the
Other business segment, all the remaining four business segments
of Grupo Televisa witnessed considerable sales growth.
Quarterly gross margin was 58.3% compared with 56.7% in the
year-ago quarter. Third-quarter consolidated operating income was
$377.4 million, up 8.6% over the prior-year quarter. Quarterly
operating margin was 28% compared with 28.1% in the year-ago
Capital expenditure, during the reported quarter, was $228.2
million. At the end of the third quarter of 2012, Televisa had a
little over $1,675 million in cash and marketable securities
compared with $1,549.9 million at the end of 2011. At the end of
the reported quarter, Televisa had $4,113.9 million of
outstanding debt on its balance sheet compared with $4,059.1
million at the end of 2011. At the end of the previous quarter,
debt-to-capitalization ratio was around 0.45 compared with 0.49
at the end of 2011.
Quarterly total revenue was $648 million, up 4.4% year over
year. Operating profit was $328 million, up 5.6% year over year.
Quarterly operating margin was 50.6% compared with 50% in the
year-ago quarter. Royalty from Univision was $62 million, up 6.5%
year over year.
Within this segment, Advertising revenue was $474.9 million,
up 1% year over year. Network Subscription revenue was $63.8
million, up 22.2% year over year. Licensing and Syndication
revenue was $109.3 million, up 11.3% year over
Quarterly revenue was $64.3 million, up 16.7% year over year.
Operating profit was $9.6 million, up 1% year over year.
Quarterly operating margin was 14.9% compared with 15.1% in the
Quarterly revenue came in at $288.9 million, up 18.9% year
over year. Operating profit was $133 million, up 17.6% year over
year. Quarterly operating margin was 46% compared with 46.5% in
the year-ago quarter.
Cable and Telecom Segment
Quarterly revenue was $301.9 million, up 14.6% year over year.
Operating profit was $111 million, up 19% year over year.
Quarterly operating margin came in at 36.8% compared with 35.4%
in the year-ago quarter.
Other Businesses Segment
Quarterly revenue was $71.4 million, down 4.4% year over year.
Operating income was $0.9 million compared with an operating loss
of $0.5 million in the year-ago quarter. Quarterly operating
margin was 1.3% compared with a negative 0.7% in the year-ago
As of September 30, 2012, Televisa had 2,263,631 Video
subscribers; 1,249,377 Internet Broadband subscribers; and
729,982 Telephony subscribers, which together constitutes
4,242,990 revenue generating units (RGU) in the Cable and Telecom
segment. As of September 30, 2012, Televisa had 4,883,388 net
active Satellite TV subscribers including 161,484 commercial
subscribers. These figures were up 27.7% and 3.8% year over year,
respectively. In the reported quarter, Sky segment generated a
record-high 332,693 net active subscribers.
Televisa is on the verge of entering into the lucrative
Mexican wireless market through its partnership with Grupo
Iusacell. Mexican wireless market is highly monopolistic. Telcel,
a unit of
America Movil SAB
), controls over 70% of the market,
) controls more than 22%, and Iusacell controls hardly 5% of
market share. Undoubtedly, a foothold in the lucrative wireless
market will make Televisa a highly integrated broadcasting and
telecom operator in Mexico.
We maintain our long-term Neutral recommendation on Televisa.
Currently, it holds a short-term Zacks #3 Rank (Hold) on the
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