World Cup Fever Fuels Second-Quarter Growth at Televisa
(Bloomberg) -- Mexico’s World Cup run may be over, but the team brought a windfall to Grupo Televisa SAB last quarter.
Televisa, the world’s biggest producer of Spanish-language television, saw programming sales climb 36 percent in the second quarter -- helped by demand for soccer broadcasts. Advertising revenue also surged, fueled in part by a new strategy that links prices to ratings.
Though Mexico was eliminated from the World Cup last week, the ratings boost brings a halo to a company mulling its next steps. Televisa has contemplated spinning off its cable-TV operations, which saw sales climbed 9.8 percent to 8.8 billion pesos ($390 million) last quarter. That beat Banorte analysts’ estimates.
There was an "impressive turnaround in advertisement," JPMorgan analyst Andre Baggio wrote in a note. Even excluding some favorable one-offs, revenue was up 8 percent, he wrote. "We expect a positive reaction to these numbers."
Televisa also has been publicly evaluating a breakup. It already sold a stake in a shopping channel and a 19 percent stake in Spanish media group Imagina. Executives are invited to attend this week’s Allen & Co. conference in Sun Valley, Idaho, where they’ll have a chance to discuss ideas with other media giants.
Advertising sales rose 9.1 percent to 5.3 billion pesos, the broadcaster said. Sublicensing of World Cup rights in Mexico and other Latin American markets, meanwhile, added 1.7 billion pesos.
Shares rose as much as 4.1 percent to 78.33 pesos on Tuesday while its American Depositary Receipts rose as much as 4.7 percent to $20.52.
Sales at Televisa’s satellite-TV business, Sky Mexico, were nearly unchanged, with a gain of 0.3 percent. AT&T Inc. owns 41 percent of that business.
The company posted net income of 4.3 billion pesos, beating the 1.6 billion peso average of analysts’ estimates. Sales climbed 16 percent to 26.7 billion pesos in the second quarter. That beat analysts’ estimates of 24.9 billion pesos, according to data compiled by Bloomberg.
©2018 Bloomberg L.P.