Grupo Televisa S.A.B.
) reported fourth-quarter 2011 financial results, which fell below
the Zacks Consensus Estimates. A significant surge in financing
costs hurt the company the most. Quarterly consolidated net
income was approximately $155 million, down 17.3% year over year.
Fourth-quarter EPGDS (Earnings per Global Depository Shares) was 27
cents, significantly below the Zacks Consensus Estimate of 36
cents. Quarterly consolidated net revenue of $1,306.6 million was
an improvement of 10.9% over the prior-year quarter but miles below
the Zacks Consensus Estimate of $1,409 million. Fiscal 2011 royalty
from Univision was $224.9 million, up 44.1% year over year.
Quarterly gross margin was 56% compared with 55.7% in the
year-ago quarter. Fourth-quarter consolidated operating income was
$387.7 million, up 16.2% over the prior-year quarter. Quarterly
operating margin was 29.7% compared with 28.3% in the year-ago
At the end of 2011, Televisa had approximately $1,549.9 million
cash and marketable securities compared with $2,548.8 million at
the end of 2010. Capital expenditure during 2011 was $791 million.
At the end of 2011, Televisa had $4,059.1 million of outstanding
debt on its balance sheet compared with $3,894.8 million at the end
of 2010. At the end of 2011, the debt-to-capitalization ratio was
0.49 compared with 0.47 at the end of 2010.
Television Broadcasting Segment
Quarterly revenue was $517.4 million, up 5.1% year over year.
Operating profit was $254.3 million, up 3.5% year over year.
Quarterly operating margin was 49.1% compared with 49.9% in the
Pay Television Networks Segment
Quarterly revenue was $75.6 million, up 23.3% year over year.
Operating profit was $37.9 million, up 3.1% year over year.
Quarterly operating margin was 50.1% compared with 59.9% in the
Programming Exports Segment
Quarterly revenue was $97.1 million, up 34.5% year over year.
Operating profit was $52.5 million, up 35.1% year over year.
Quarterly operating margin was 54.1% compared with 53.8% in the
Quarterly revenue was $69.7 million, up 3.3% year over year.
Operating profit was $11.4 million, down 9.8% year over year.
Quarterly operating margin was 16.3% compared with 18.7% in the
Quarterly revenue came in at $228.3 million, up 3.3% year over
year. Operating profit was $100.8 million, up 10.8% year over year.
Quarterly operating margin was 44.1% compared with 44.3% in the
Cable and Telecom Segment
Quarterly revenue was $262.7 million, up 16% year over year.
Operating profit was $99.9 million, up 27.8% year over year.
Quarterly operating margin came in at 38% compared with 34.5% in
the year-ago quarter.
Other Businesses Segment
Quarterly revenue was $80.4 million, up 7.8% year over year.
Operating loss was $4.8 million, down 37.9% year over year.
Quarterly operating margin was a negative 5.9% compared with a
negative 10.3% in the year-ago quarter.
As on December 31, 2011, Televisa had 2,182,819 Video
subscribers; 1,066,641 Broadband subscribers; and 649,860 Telephony
subscribers. Together these constitute 3,899,320 revenue generating
units (RGU) in the Cable and Telecom segment. As on December 31,
2011, Televisa had 4,008,374 gross active Satellite TV subscribers
including 157,646 commercial subscribers. These figures were up
31.7% and 5.2% year over year, respectively.
Future Financial Outlook and Restructuring
Televisa has decided to create a new operating segment called
"Content" from 2012. This segment will cover all sources of revenue
derived from its content businesses, which at present is scattered
in TV Broadcasting, Pay TV Networks, Programming Exports, and
Online services. The newly formed Content segment has three
sub-segments, namely, Advertising, Network Subscription, and
Licensing & Syndication. The content business grew 5% year over
year in 2011.
Televisa raised its 2012 capital expenditure budget by 7% to
$850 million. Univision is expected to generate $245 million of
royalty revenue in 2012. Further, management has decided to propose
an annual dividend payment of $100 million to shareholders at an
Televisa is at present facing a competitive threat from the
Telefonos de Mexico S.A.B.
), who is trying to enter the Mexican broadcast TV market passively
through a deal with DISH Mexico. We maintain our long-term
Neutral recommendation on Televisa. Currently, it holds a
short-term Zacks #3 Rank (Hold) on the stock.
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