Univision Second-Quarter Profit Drops, Revenue Rises
UPDATED: CEO Randy Falco touts the company's upfront results as executives provide some updates on a planned ABC News venture.
Univision Communications on Thursday reported a lower second-quarter profit despite a revenue increase.
The Spanish-language media giant saw its bottom line decline from $82.6 million to $31.8 million as it recorded higher expenses, charges and interest expense, as well as income taxes, where the company swung from a year-ago benefit to a provision.
But adjusted operating income before depreciation and amortization rose 0.3 percent to $253.7 million in the second quarter. Revenue increased 3.8 percent to $613 million as TV and radio revenue improved, while interactive revenue declined minimally.
“Our mission and strategy continue to be validated by the proliferation of Hispanic-focused media outlets in this country, but we remain far ahead of the pack," said Univision CEO Randy Falco. "Univision finished the 2011-2012 broadcast season with more number one nights among adults 18-49 and adults 18-34 than ever before, and we have continued to see our audiences demonstrate engagement at a level that few networks can match."
He added: "Early results of the upfront indicate that many marketers are following the example set by Tapestry and Starcom earlier this year and shifting larger portions of their budgets to Univision and away from both English- and Spanish-language competitors. To new and existing clients looking to tap into the upside potential of the growing Hispanic community, we believe we are the obvious partner.”
Falco on a Thursday earnings conference call reiterated that Univision feels good about its leadership role in Spanish-language media despite rising competition. He said the company serves a "community we understand and are trusted by." With a market share of 73 percent in its field, "we will remain ahead of the pack" and "laser focused" to stay in the lead position, he vowed.
Sharing a broader vision, Falco said Univision will during the back half of 2012 celebrate its 50th anniversary. After having gone from niche to mainstream network, the company wants to become the most trusted brand in all media, not just Spanish-language media, he said. And Falco emphasized that he sees more upside for the company over its next 50 years.
He also said that the broadcast portion of the company's upfront selling season is "virtually closed" with mid single digit ad rate growth and higher sales volume, compared with roughly unchanged volume for English-language broadcasters. He cited beverage, pharma and tech companies as key upfront ad growth contributors.
Asked about the recently announced news joint venture with ABC News, Univision management said the production location for the venture is still undecided, with talks with several states ongoing. The companies are looking for the largest possible incentives, they said.
The partners expect the venture's digital launch in fourth quarter, followed by a linear TV launch around mid-2013, Univision said.
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