Mexico's Televisa returns to profit in third quarter despite lower revenue
TV•Grupo Televisa posted a third-quarter net profit of 882.7 million pesos, compared with a loss of 1.93 billion pesos a year earlier, while revenue fell 3.8% to 14.08 billion pesos. Lower tax provisions and financial expenses offset weaker revenue and a non-cash equipment charge.
1. Profit returns
Grupo Televisa swung to a third-quarter profit of 882.7 million pesos ($48.82 million), from a loss of 1.93 billion pesos in the same period a year earlier. Revenue fell 3.8% to 14.08 billion pesos as weakness in satellite television services outweighed growth in business services.
2. Costs and subscribers
A 2.89 billion peso drop in income tax provisions and lower financial expenses primarily drove the return to profit. A one-time non-cash charge on technical equipment weighed on operating income. Broadband subscribers totaled 5.7 million, with around 9,000 net additions, while mobile subscribers reached 888,000, with 68,000 net additions.
3. Telecom expansion
Televisa recently agreed to buy AT&T's Mexican unit for $2 billion in cash. The company has been shifting toward broadband and mobile services as demand for traditional pay-TV declines, and said in April it expected capital expenditures in the low twenty-percent range of revenues this year as it upgrades its telecommunications network.
