• by Joe Mandese  @mp_joemandese, May 6, 2005

Despite strong audience momentum, Spanish-language TV giant Univision turned in relatively modest first quarter results, raising questions about whether it can convert its formidable share of TV viewing into a corresponding advertising market share. Analysts project Univision will take in about $1.4 billion in TV advertising sales during 2005, with network sales up about 11 percent over 2004, but a combination of factors including the lack of major sports properties and tough quarterly comparisons in one major ad category: long distance phone services.

And while Univision's ad performance is expected to improve during the second half of 2005, at least one major Wall Street analyst is questioning how the Hispanic TV network might perform during the 2005-06 upfront network TV marketplace.

"We believe investors are likely to remain on the sidelines until it is clear [Univision] is able to monetize its improved ratings in the 2005 upfront advertising market. Risks to our rating include a better than expected upfront and accelerating growth in the second half of 2005," wrote Merrill Lynch analyst Jessica Reif Cohen in a report distributed to investors on Thursday.

The report notes that while Univision had strong first quarter results, they came mainly from operations other than TV, including music. That's a concern, because Univision has been experiencing tremendous growth in TV ratings, benefiting from its dominant position among Spanish-speaking TV viewers. In fact, the company disclosed research this week showing that during the first quarter it regularly beat the Big 4 Anglo broadcast networks among mainstream demographics.

"Univision has been growing consistently and performing better than ever. This quarter, on three out of every four nights, the Univision Network delivered a larger adult 18-34 audience than one or more of the 'Big 4' English-language networks among both Hispanics and non-Hispanics in primetime," noted President-COO Ray Rodriguez. "We reached the largest television audiences in our history."

Total U.S. Primetime Audience Stats*

              Q1
05                         Q1 05  
         18-34 Avg.     18-34 Growth   18-49 Avg.     18-49 Growth  
       Audience(000)  Q1 05 vs Q1 04  Audience(000)  Q1 05 vs Q1 04  

Univision
1,526            +58%         2,294            +39%  
ABC            1,998            +21%         4,984            +20%  
CBS            1,905             -4%         5,160             -6%

FOX            2,973             +5%         6,278            +10%  
NBC            1,904            -20%         4,651            -17%  

Source: Nielsen Media Research(12/27/04-3/27/05). Based on network programming hours. *Univision primetime defined as M-Su 7p-11p. English-language. Broadcast networks primetime defined as M-Sa 8-11p, Su 7-11p.