July 11, 2017 / 1:04 PM / a year ago

Mexico's Televisa shares drop after 'difficult' first half year

MEXICO CITY (Reuters) - Shares of Grupo Televisa (TLVACPO.MX) (TV.N) fell on Tuesday after the Mexican media heavyweight reported a dip in second-quarter revenue that disappointed investors already worried by viewers and advertisers turning to online rivals.

The logo of broadcaster Televisa is seen outside its headquarters in Mexico City, Mexico, July 10, 2017. REUTERS/Edgard Garrido

Televisa late on Monday reported a 1.5 percent fall in revenues, with advertising revenue slumping 9.8 percent as the world’s largest maker of Spanish-language content wrestled with a global trend toward content delivered over the Internet instead of traditional television.

“We have had a difficult first half of the year. We’re not pleased with the results,” Executive Vice President Alfonso de Angoitia told analysts on a conference call. “I think the second half will be better, but we have limited visibility.”

Televisa plans to restructure its sales team, overhaul the way it has sold advertising for several decades, and streamline the cost of creating content, executives said on the call.

Its stock fell 2.6 percent on Tuesday, to 90.62 pesos while its U.S.-traded shares lost 2.47 percent to $25.29.

Like its U.S. peers, Televisa is under pressure as younger viewers shun cable bundles in favor of cheaper streaming options including Netflix Inc (NFLX.O), and as advertisers redirect spending to online ads.

“The content division’s performance leads to concerns about the commercial strategy and the company’s prices,” Santander wrote in a note to clients on Tuesday.

Televisa's stock has gained 3 percent in 2017, underperforming a rise of 11 percent in Mexico's benchmark S&P/BMV IPC index .MXX.

Known for its “telenovela” soap operas, Televisa added subscribers to its voice, data and video cable services during the quarter, compared with the prior three months. However, compared with the second quarter of 2016, its total number of video subscribers was down 3 percent.

Televisa reported a net profit of 1.453 billion pesos ($80.1 million), up 2.6 percent from a year earlier and helped by lower financial costs.

It recently won a court order blocking the sale of Roku streaming devices in Mexico on grounds that the gadgets are used by criminals to illegally sell pirated television content.

Editing by Marguerita Choy

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