MEXICO CITY — Televisa posted better-than-expected second-quarter results, particularly in light of a so-so first quarter, prompting a 3.7% increase in the stock price.
Second-quarter revenue jumped 17%, to 3.31 billion pesos ($424.5 million), while it registered a net profit of 4.89 billion pesos ($627 million) vs. a loss in the second quarter of last year of 279 million pesos ($35 million), the company said in a Wednesday statement. Results included a one-time gain from the sale of Televisa’s interest in PanAmSat.
In the first quarter of this year, it had posted a loss of about $25 million — already 60% smaller than its loss in the first quarter of 1996.
“Their cost-containment and cost-reduction programs are working — that is quite apparent,” Merrill Lynch analyst Pablo Riveroll said.
Televisa made cost reduction a major goal in its Televisa 2000 plan it presented to investors in May.
Another analyst took a more negative view. “I wasn’t very impressed with the quarter,” he said. “It was disappointing to see additional costs — it’s still a very inefficient operation.”
The company attributed additional costs to the expense of developing new programming to compete with TV Azteca, “which is reasonable,” he averred.
However, TV Azteca continues to grab ad spend from its bigger rival, Riveroll said. “TV Azteca was able to get about 31% of the ad market in the first half of the year — that’s pretty good,” he said.
Television ad revenue received a significant boost in the second quarter from political advertising leading up to Mexico’s elections July 6. Such political spending will be nonexistent going forward, Riveroll noted.
On Wall Street, Televisa ADRs closed up Thursday — after declines last week that continued onto Monday — by $1.06, to $29.82. The stock began to recover Tuesday after reports of boardroom upheaval were put to rest with Monday’s announcement of the resignation of chief corporate officer Guillermo Canedo White.
Televisa still is looking for a new chief financial officer.
In the meantime, TV Azteca is readying its entry into the stock market. Mexico’s No. 2 broadcaster issued a statement Thursday in which founding partner Alberto Saba said he would be selling his shares in the upcoming initial public offering.
Saba will remain on the board of directors, TV Azteca said, and his son and fellow co-founder Moises Saba will continue in his position of executive president. The two men had been rumored to be both selling out and leaving the company.