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Univision Stock Falls After Q4 Warning

Nov 5, 2004  •  Post A Comment

Shares of Spanish-language broadcaster Univision Communications tumbled as much as 12 percent Friday after the company warned that its fourth-quarter sales would miss analysts’ projections.

The company late Thursday forecast fourth-quarter revenue growth in the low to mid-single digits — far short of the double-digit growth that Univision has produced in past quarters. The company said the fourth-quarter result does not reflect a new trend but rather is attributable to several short-term factors, including a weak scatter market.

The company in the third quarter posted a 49 percent increase in revenue.

The warning left Univision’s stock trading at $28.90 a share at midday Friday, down $3.90, and triggered a downgrade of the stock by a CIBC World Markets analyst. It also had other analysts wondering whether the slower growth would last longer than the fourth quarter.

Univision has been one of the rare media companies that have continued to deliver strong growth even as other media concerns have languished, in large part because of the company’s popularity among Spanish-speaking consumers in the United States.

Despite lower revenue projection, J.B. Hanauer analyst David Joyce suggested that if the market reacts badly to the warning, it could provide an opportunity to accumulate a stock on which he is quite bullish.