Televisa Earnings: The Cable Business Continues to Disappoint

Televisa’s core cable business continues to struggle as management attempts to reset its market approach. New cable CEO Francisco Valim provided extensive thoughts on the business, noting that Televisa needs to prioritize efficiency and increasing revenue per customer to improve cash flow, while also stating the obvious: the Mexican broadband industry needs consolidation. Unfortunately, Televisa’s rivals don’t share this point of view, as Megacable clearly declared its intention to continue aggressively expanding its network on its earnings call. The TelevisaUnivision business generated strong revenue growth, but it continues to burn cash as it builds out ViX, its streaming service. We are maintaining our $8 fair value estimate, and we don’t believe much needs to go right for Televisa from here to justify the current stock price.