Univision Communications Loses $74.1 Million in Q1

Revenue rises more than 6 percent, which executive vp and COO Randy Falco credits to continued ratings gains.

NEW YORK – Univision Communications reported a wider first-quarter loss on Friday as higher revenue was offset by increased expenses and restructuring and severance charges.

The Spanish-language media giant said its quarterly revenue increased 6.2 percent to $481.8 million driven by gains in its TV and interactive businesses amid stronger advertising trends.

But it posted a $74.1 million loss for the first quarter, compared with a year-ago loss of $3.4 million.
Adjusted operating income before depreciation and amortization, which media companies often use as a measure of performance, dropped 6.3 percent to $169 million. When excluding a $15 million one-time benefit in the year-ago period, which the company said was “settlement income received from a third party related to a commercial matter,” OIBDA was up 2.2 percent.

“Our first quarter results were strong, driven by the continuing outperformance of our television properties, including our flagship network which rose to number 4 in the country beating NBC among adults 18-34 in primetime for the entire quarter,” said Randy Falco, executive vp and COO. “We believe Univision is on the verge of a groundswell of greater allocation of ad spend due in part to the U.S. Hispanic population growth - documented by the Census as 43 percent over the last ten years - and our expanded access to Televisa programming that we can now leverage through traditional cable channels, as well as digital and new media platforms, including major over-the-top distributors.”

Ahead of this year’s upfront advertising market, he said: “We are confident that these powerful trends, coupled with key category growth and favorable pricing dynamics, will make the 2011 selling cycle a success for Univision.”

On a conference call, he predicted that more advertisers will take note of population trends and spend more on reaching Hispanic consumers. "We expect that over the next several years, Hispanic consumers will begin to command up to 10 percent of these marketers' budgets, double the current average, as major brands look to this expanding consumer group to propel meaningful growth," he said.
In some cases, the figure will be closer to 25 percent, Falco suggested.

Falco started management comments on Friday's call as Joe Uva recently decided not to extend his president and CEO contract at Univision.

CFO Andrew Hobson said the national TV advertising business is growing in the low double digit percentage range in the current second quarter, when excluding the benefits of the soccer World Cup from the year-ago calculation.

Asked about competition from other TV network groups that have announced Spanish-language channels or ad sales groups targeting Hispanics, Hobson said: "We have always had competition...We are an incredibly competitive company...and we are going to fight to maintain our business."

Asked if the company's radio business is a core asset, Hobson said it allows a low-cost entry point for local advertisers. "We consider radio core, but we are also mindful that maybe there are better people to operate local radio business," he said. "I guess we would entertain offers, but we don't really think that it's likely that we sell it any time in the near to intermediate future."

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