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Univision Profit Slides 14% on Net, Music Unit Losses

Earnings: Revenue increased 3% in the second quarter. Media firm expects sales for remainder of year to be slightly below estimates.

August 02, 2001|MEG JAMES | TIMES STAFF WRITER

Univision Communications Inc., the nation's dominant Spanish-language broadcaster, reported that its second-quarter net income dropped 14% because of losses at its Internet and music businesses.

Univision's earnings fell to $28.6 million, or 12 cents a share, from $33.4 million, or 14 cents, in the same quarter last year.

"Their numbers are down, but that's a factor of the overall economy," said David Joyce, a media analyst with Guzman & Co. in Miami. "It's not anything Univision-specific or Spanish-language-specific."

Univision's revenue increased 3% to $237.5 million in the second quarter from $231.1 million for same period in 2000.

Losses at Univision's Internet business widened to $10.8 million from $7.5 million in the year-earlier quarter. And the company's music group, which opened in April, had a loss of $800,000.

But Los Angeles-based Univision also said its television ratings made gains in prime-time viewers, including a 25% increase in men ages 18 to 34, a prized audience among advertisers.

Spanish-language media "is the best advertising medium that corporate America could be focusing on right now," Joyce said.

Univision shares closed Wednesday at $38.70, up 52 cents on the New York Stock Exchange.

Univision expects its revenue for the rest of the year to be slightly below earlier estimates. The firm expects third-quarter revenue to be between $218 million and $226 million, with revenue for the full year of $916 million to $935 million, said Executive Vice President Andrew Hobson.

The firm was expected to post revenue of $233 million in the third quarter and revenue of $943 million for the year, according to First Call/Thomson Financial estimates. "Our current guidance reflects a slower recovery . . . during the second half of the year," Hobson said.

During the last quarter, Univision spent $295 million to buy USA Broadcasting Networks television stations in Miami, Dallas and Atlanta to fortify Univision's second network, Telefutura, which the company plans to launch in January.

Univision announced in June that it was entering the television market in Puerto Rico, purchasing two television stations that reach the island's population of 1.3 million.

Telefutura will broadcast movies, news and sports programming, including the wildly popular World Cup soccer matches.

"They have a great opportunity to launch their new network in an environment that is not as competitive as it looked a year ago," said James Marsh, a media analyst with Robertson, Stephens.

Univision's chief rival, Miami-based Telemundo, "has been stripped of some of its most popular programming," Marsh said.

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