Televisa Earnings: Disappointing Broadband Customer Growth and Cable Margins

Televisa reported disappointing second-quarter results, posting a net decline in cable broadband customers and a sharp contraction in cable profitability. Management highlighted the appointment of telecom veteran Francisco Valim to head the cable business. Valim, who has served as CEO of several firms in Brazil, hasn’t yet officially joined Televisa but addressed investors briefly, mentioning an ongoing structural review that will serve as the basis for improving cash flow. We are cutting our fair value estimate to $9 from $10, as the strong peso partially offsets cuts to our growth and margin expectations.