MEXICO CITY — TV Azteca, Mexico’s second largest broadcaster, reported a resounding 136% growth in earnings for the first quarter, based on record advertising sales.
The booming results turned around a 20% earnings decline in the previous quarter and put Azteca back on track with increasingly positive results it had been reporting last year. They also soothed investors concerned about securities fraud investigations of chairman Ricardo Salinas by the U.S. and Mexico.
Azteca reported a profit of 183 million pesos ($16.5 million) for the period, up $7 million from the previous year.
This increase was based on net’s vigorous 8.2% topline growth. In the first quarter, Azteca revenues reached $139 million as compared to $128 million in 2003.
Azteca chief operating officer Mario San Roman said the lift was thanks to programming that reached the target audiences of advertising clients.
Much of the credit should go to the net’s increased investment. Azteca has upped production spending for two quarters; for the first quarter, overhead rose 8%, in great part due to a 12% bump in programming, production and transmission costs, which reached $60 million.
Azteca also benefited from its consistent efforts to lower debts and debt payments. In February it liquidated a $125 million bond.
Azteca also announced encouraging results from its U.S. unit, Azteca America, whose $6 million net profit was a huge increase from the $300,000 it earned a year earlier. Its Internet site, Todito.com, doubled earnings to $6 million.
Finally, Azteca said it benefited from a 1% peso gain against the dollar for the period, leading to a $2 million profit, as compared to a $9 million loss thanks to a 3% peso decline a year earlier.
The results were in line with Wall Street’s expectations but disappointed traders who had expected stronger growth. Because of this, shares in TV Azteca fell 45¢ to $9.40 on the New York Stock Exchange.