April 24 (Bloomberg) -- TV Azteca SAB, Mexico’s second-largest broadcaster, dropped the most in more than a year after government delays in advertising spending cut into profits.
Azteca slid 6.3 percent to 9.23 pesos at the close in Mexico City, the biggest one-day drop since August 2011. The shares have climbed 8.8 percent this year, compared to a 3.2 percent decline for the benchmark IPC index.
The broadcaster and its larger rival, Grupo Televisa SAB, count on commercials purchased by government agencies to promote their initiatives. Televisa said in February that some government agencies didn’t participate in its annual advance sales of advertising because they were busy with the transition to a new presidential administration.
“The sales decline is explained by the lower revenue from advertising, principally from government since it’s in the middle of redefining its communications projects,” Andres Audiffred, an analyst at Grupo Financiero Ve Por Mas SA, said today in an e-mailed report.
First-quarter net income fell to 151.6 million pesos ($12.3 million) from 437.7 million pesos a year earlier, Azteca said yesterday after the close of trading. Sales decreased 12 percent to 2.42 billion pesos, missing Audiffred’s estimate of 2.83 billion pesos.
Azteca, based in Mexico City, said yesterday that it expected government projects would recover later this year.
Televisa, which is scheduled to report first-quarter results tomorrow, dropped 1.1 percent to 63.09 pesos.
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