Telecinco profits rise for 3rd qtr.

Gross operating profit up 7% on a year earlier

MADRID — Driven by coverage of Formula One auto racing as well as by “CSI” and Spanish primetime dramas, Mediaset-owned Telecinco is pumping out profits.

Net third-quarter income stood at e42.9 million ($53.8 million), up 17% on the same period in 2005 off net sales of $222.6 million.

Gross operating profit, the real indication of Telecinco’s health, came in at $68.6 million, up 7% on a year earlier, yielding 30.8% operating profit margins.

“Telecinco’s results reflect that it’s maintaining its dominant audience share, despite competition, and its ability to pass on hikes in advertising rates despite losing gross rating points,” said Fabial Lares at Espirito Santo Investment.

Gross ratings points measure how many viewers see ads in Spain. They have been falling for Telecinco as competition bites from startup broadcasters Cuatro and La Sexta.

But the free-to-air broadcaster still lifted advertising rates 12% from July to September as it pulls away from its nearest competition, notching up a market-leading all-day 21.3% share through September compared to Antena 3’s 19.8% and TVE-1’s 18.2%.

Leading ratings performers included Formula One, with the last race of the season in Brazil grabbing a 36.8% share, while the fourth season of “CSI Miami” notched up 25%-30% shares and the second season of “CSI NY” made 26%-34%.

Still, there are two clouds on Telecinco’s horizon.

Last week “House” on Cuatro overtook viewers for Telecinco’s long-running cop drama hit “El Comisario,” an indication that Cuatro and La Sexta will eat further into Telecinco auds.

And financial markets have factored in government-imposed five-minute ad cuts on pubcaster TVE-1, due sometime next year. If the cuts don’t occur, Telecinco stock will fall.

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