Univision Quarterly Earnings Rise, Revenue Drops, CEO Touts Ratings

Randy Falco Getty H 2016
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The Spanish-language media giant, which has been eyeing an IPO, and media mogul John Malone reportedly recently approached its owners about buying a big stake.

Spanish-language media giant Univision Communications on Thursday posted its second-quarter financials.

Univision, which has been planning an IPO, but recently reportedly also saw John Malone approach its owners about a possible acquisition of a big stake, posted a second-quarter profit of $106.1 million, up 42 percent compared with a year-ago profit of $74.7 million.

The latest figure included a "pre-tax gain on sale of assets," netting out to $16.6 million, and a a pre-tax charge for loss on extinguishment of debt of $300,000, compared to $16.3 million for the second quarter last year. Excluding the asset sale gain, earnings rose to $89.5 million from the year-ago period. Also excluding the debt extinguishment costs, the latest earnings would have amounted to $89.8 million and the year-ago figure to $91.0 million.

Quarterly adjusted operating income before depreciation and amortization (OIBDA), another profitability metric, declined 0.1 percent to $328.7 million amid a 2.6 percent gain at the company's media networks unit and a 20.5 percent decline at its radio division.

Univision's second-quarter revenue dropped 4.4 percent to $764.9 million. During the latest quarter, advertising revenue fell 17 percent to $468.3 million. Non-advertising revenue, including carriage fees and content licensing, rose 25.7 percent to $296.6 million.

But Univision said its core revenue for the quarter increased 5.3 percent to $753.5 million. And on a pro forma basis, assuming all 2016 acquisitions occurred at the start of that year, core revenue edged up 0.7 percent to $753.5 million.

The company said costs for sports and news coverage fell in the period.

The Spanish-language media giant, led by CEO Randy Falco, operates such assets as broadcast networks Univision Network and UniMas, formerly Telefutura, as well as cable channel Galavision and sports network Univision Deportes.

Falco said: "Our strong ratings performance as the number one Spanish-language network in both the May and July sweeps positions us well to monetize our diverse assets and premier brand. We are also focused on driving our next phase of growth by leveraging emerging technologies and unique consumer experiences as the media and technology industries continue to converge."

Falco on the earnings call said the company had widened its audience lead over Spanish-language competitors, lauding UniMas for beating Telemundo in the latest quarter thanks to hit series Moses.

Falco also touted Univision's growing digital advertising revenue, highlighting that it is approaching 10 percent of total company ad revenue.

Asked about ad momentum, the third quarter is trending up in the low single-digit percentage range in Univision's media networks unit, excluding a soccer tournament, said CFO Francisco Lopez-Balboa. The digital business is doing well, while local TV trends are continuing to remain challenged and are pacing lower, he explained.

Discussing pay TV subscriber trends amid the continuing debate about cord cutting, he said Univision's subscriber numbers were down slightly in the latest period. 

After recent digital deals, such as for The Onion and The Root, Falco said: "We have the scale to move forward," adding: "We are not really looking for major acquisitions."