If you can tear yourself away from tonight's novelas, you can tune in to Univision's
What analysts say:
- Buy, sell, or waffle? Sixteen of 22 analysts recommend buying this stock, while four say hold and only two want to sell.
- Revenues. Sales should show a 5% uptick over last year, to $456 million.
- Earnings. Fifteen cents of earnings per share are expected, up 15% over last year. The analysts are looking for better net margins this time, as well they should.
What management says:
The 2005 annual report talks about the expanding Hispanic population and the opportunities this trend brings to the market for Spanish-language television programming. "Hispanics are expected to account for more than $1 trillion of U.S. disposable income (9.7% of the U.S. total) by 2010, outpacing the expected growth in total U.S. disposable income," according to the report, and Univision controls the lion's share of the media market for selling to this important demographic.
What management does:
While gross and operating margins are fairly stable for this large media company -- with its predictable expenses and ad revenues -- quarterly net margins have been a rollercoaster ride. In fact, that ride has been going decidedly downhill lately.
Margins % |
9/04 |
12/04 |
3/05 |
6/05 |
9/05 |
12/05 |
---|---|---|---|---|---|---|
Gross |
61.77 |
62.87 |
62.46 |
62.26 |
62.51 |
62.61 |
Op. |
26.87 |
29.03 |
29.23 |
29.53 |
29.94 |
27.65 |
Net |
13.05 |
14.31 |
14.4 |
11.76 |
11.95 |
9.59 |
One Fool says:
It's a story of margin control. If the completed quarter saw some improved cost control, we could be in for a pleasant earnings surprise tonight. If not, it's back to the slide. But that may not be the biggest story tonight.
Buyout rumors are swirling around Univision, with Mexican media giant GrupoTelevisa
Given the expansion and rising affluence of the Hispanic media market, it's no surprise that there are multiple potential suitors for this blushing Latin beauty. Univision stations command nearly 50% of all Hispanic eyeballs on the TV screen, and grabbing hold of that juicy demographic through a single acquisition could prove too tempting to pass up.
But whoever the eventual winner is, they'll have to grab a firm hold of the reins. Those net margins can't be allowed to slide forever. Fresh faces in the management team could bring in some ideas on how to pull out of that nosedive and start growing earnings, not just sales.
Bottom line: There is great potential here, as long as proper attention is paid to the nuts and bolts of the operation.
Competitors:
- CBS
- Disney, owner of ABC
- Grupo Televisa
-
GE
(NYSE:GE) , the indirect owner of Telemundo through NBC
Disney is a Motley Fool Stock Advisor selection.
Fool contributor Anders Bylund wishes he could be as cool as Don Francisco. He doesn't own any stock in the companies he discusses -- yet. He will have a few Disney shares when the merger with Pixar is completed. Disclosure can be tricky, but it must be done.