Univision Sends Out Mixed Picture

Spanish-language media giant Univision Communications Inc. reported Thursday that its third-quarter net income vaulted 74% as more advertisers targeted Latino customers.

But executives warned that ad revenue would be down through the end of the year. They said several advertisers -- particularly movie studios, long-distance telephone companies and retailers -- had slashed their ad buys for the fourth quarter.

Analysts were puzzled. David W. Miller, a media analyst with investment banking firm Sanders Morris Harris, said Univision’s fourth-quarter projections “surprised everybody.”

Movie studios typically boost advertising at the end of the year to promote big releases, while retailers traditionally buy TV time to drum up holiday sales.

Univision, which is controlled by Los Angeles billionaire A. Jerrold Perenchio, released its earnings after the markets closed.

Shares of Univision rose 10 cents to $32.80 during regular trading on the New York Stock Exchange. The stock dropped $2.55 in after-hours trading.

Century City-based Univision said its third-quarter net income was $73.4 million, up from $42.2 million a year ago. It earned 21 cents a share, compared with 16 cents in 2003.

The earnings beat the estimate of 20 cents a share by analysts surveyed by Thomson First Call.

Net revenue grew 49% to $477.4 million, compared with $321.1 million last year.

Univision executives said the forecast for lower ad revenue was because of a weak market for last-minute buys of time. Chief Financial Officer Jeffrey Hinson said the dip in demand was probably the result of several factors, including uncertainty about the outcome of the presidential election, the economy and “our customers’ own business prospects.”

He declined to predict how low ad revenue would go and suggested that some advertisers had simply shifted their dollars into the first half of next year.

“Our television business is going to do well in the first half of ‘05,” Hinson said.

Analysts on a conference call with Hinson pointed out that earlier this week, Viacom Inc. and News Corp., which control CBS and Fox, had forecast a strong demand for network ad time during the fourth quarter.

In the third quarter, Univision captured fewer political ad dollars than it did during the presidential race four years ago.

“Most of our stations were not located in battleground states,” Hinson said.

In all, he said, the company’s TV stations garnered about $2 million in political spending, and its radio stations took in $1.3 million.

Univision said the revenue from its three TV networks -- Univision, TeleFutura and cable channel Galavision -- climbed to $328.1 million from $283.9 million last year.

Despite a spirited challenge from NBC Universal’s Telemundo, Univision said its TV networks continue to control three-quarters of the audience for Spanish-language television.

Univision radio posted revenue of $89.9 million for the third quarter, up from $7.4 million the previous year. (Univision acquired the radio chain in September 2003.) The music group delivered $54.9 million in revenue, compared with $25.7 million a year earlier.