Grupo Televisa S.A.B.
) reported its second-quarter fiscal 2012 financial results,
missing the Zacks Consensus Estimate by a penny. Quarterly
consolidated net income was approximately $131.9 million, down
11.3% year over year. The year-over-year decline primarily resulted
from an increase in foreign exchange loss along with a non-cash
change in fair value of the company's investment in GSF Telecom
Holdings, the parent company of Grupo Iusacell. First-quarter
earnings per Global Depository Shares were 23 cents, a penny short
of the Zacks Consensus Estimate of 24 cents.
Quarterly consolidated net revenue of around $1,255.1 million
was an improvement of 12.3% over the prior-year quarter. All the
five revenue generating segments of Grupo Televisa witnessed
considerable sales growth.
Quarterly gross margin was 56.5% compared with 55.9% in the
year-ago quarter. Second-quarter consolidated operating income was
$345 million, up 13.9% over the prior-year quarter. Quarterly
operating margin was 27.5% compared with 27.1% in the year-ago
At the end of the first half of 2012, Televisa had a little over
$1,557.7 million cash and marketable securities compared with
$1,549.9 million at the end of 2011. Capital expenditure, during
the reported quarter, was $12.4 million. At the end of the first
half of 2012, Televisa had $3,980.9 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 0.47 compared with 0.49 at the end of 2011.
Quarterly total revenue was $579.8 million, up 8.2% year over
year. Operating profit was $279.2 million, up 7.3% year over year.
Quarterly operating margin was 48.2% compared with 48.6% in the
year-ago quarter. Royalty from Univision was $64.2 million, up 6.7%
year over year.
Within this segment, Advertising revenue was $411.4 million,
down 0.1% year over year. Network Subscription revenue was $59.5
million, up 31.3% year over year. Licensing and Syndication revenue
was $108.9 million, up 37.8% year over year.
Quarterly revenue was $68.6 million, up 16.7% year over year.
Operating profit was $11.5 million, up 2% year over year. Quarterly
operating margin was 16.7% compared with 19.1% in the year-ago
Quarterly revenue came in at $262 million, up 13.6% year over
year. Operating profit was $123.3 million, up 11.5% year over year.
Quarterly operating margin was 47.1% compared with 47.9% in the
Cable and Telecom Segment
Quarterly revenue was $286.1 million, up 16.2% year over year.
Operating profit was $108.9 million, up 32.9% year over year.
Quarterly operating margin came in at 38% compared with 33.3% in
the year-ago quarter.
Other Businesses Segment
Quarterly revenue was $82.3 million, up 20.1% year over year.
Operating income was $3.8 million, up 366.1% year over year.
Quarterly operating margin was 4.6% compared with 1.2% in the
As of June 30, 2012, Televisa had 2,232,831 Video subscribers;
1,176,250 Broadband subscribers; and 699,303 Telephony subscribers,
which together constitutes 4,108,384 revenue generating units (RGU)
in the Cable and Telecom segment. As of June 30, 2012, Televisa had
4,550,695 gross active Satellite TV subscribers including 161,191
commercial subscribers. These figures were up 26.9% and 4.7% year
over year, respectively.
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 #2 Rank (Buy) on the
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