Televisa Profit Declines 29% as Advertising Spending Weakens

Grupo Televisa SAB, the largest maker of Spanish-language TV programs, said first-quarter profit fell 29 percent as broadcast advertising weakened.

Net income dropped to 1.07 billion pesos ($88 million), or 38 centavos a share, from 1.51 billion pesos, or 53 centavos, a year earlier, Mexico City-based Televisa said yesterday in a statement. Sales rose 2.4 percent to 15.5 billion pesos, missing the 16.2 billion-peso average of two analysts’ estimates in a Bloomberg survey.

Televisa is investing in networks offering cable and satellite television to reduce its dependence on the broadcast business, which is slowing as more viewers turn to the Internet and pay TV. Advertising sales dropped 7.2 percent from a year earlier to 4.21 billion pesos, partly because of a large drop in government spending.

Satellite subscriptions rose by 259,567 to 5.4 million. The three cable operators controlled by Televisa ended the quarter with 2.36 million video customers, up 6.6 percent from a year earlier.

Televisa fell 3 percent to 61.74 pesos at the close in Mexico City. The shares have fallen 9.5 percent this year, compared with a 4.1 percent decline for the benchmark IPC index.

Net income was hurt by a 16 percent increase in depreciation expenses, a smaller gain from currency fluctuations than a year earlier, and 217.7 million pesos in losses by Grupo Iusacell SA, the mobile-phone company in which Televisa has a 50 percent stake.

Operating profit, which leaves out those items, rose 3.2 percent to 3.39 billion pesos, Televisa said.

(Televisa is scheduled to discuss results on a conference call at 10 a.m. New York time. For details, click here.)

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