Hemisphere Media (HMTV) Reports Q1 Revenues Miss

Hemisphere Media (NASDAQ: HMTV) reported Q1 revenue for the quarter came in at $32.4 million versus the consensus estimate of $35.7 million.

President and Chief Executive Officer of Hemisphere, Alan Sokol, said, "Since the onset of the global pandemic, we have prioritized protecting the health and safety of our employees, working closely with our distribution and advertising partners, identifying and implementing cost-savings measures, and, critically, providing the most comprehensive, continuous and relevant news and information for our audiences in Puerto Rico and for Spanish-speakers here in the continental U.S.

During the first quarter, our expanded and groundbreaking news coverage in Puerto Rico, together with our innovative and must-see entertainment programming, resulted in WAPA breaking all historical ratings records in Puerto Rico since the inception of Nielsen, among both total viewers and Adults 18-49. In March, WAPA accounted for 43% of overall viewing among Adults 18-49 in Puerto Rico, an impressive and dominant achievement, which will ensure a continued strong share of the advertising spend.

In the U.S., viewers have relied on our cable networks for the latest news from their home countries, as well as unique and high-quality entertainment content. Several of our channels delivered record-breaking total day ratings in the first quarter. Centroamerica TV had its sixth consecutive quarter of year-over-year audience growth, with an astounding 65% increase in viewing over first quarter of 2019; Pasiones ratings were up 24% versus the first quarter of 2019, its 13th consecutive quarter of ratings growth; and WAPA America saw a 29% increase in audience versus the first quarter of 2019. During April, all of our networks have seen continued robust growth in viewers.

Notwithstanding our strong ratings performance and increased viewing, we experienced a decrease in advertising revenue in the first quarter, as the advertising market in Puerto Rico was adversely affected by the earthquakes that struck the island in January and the subsequent lockdown of the island in mid-March. In the second quarter to date, the pandemic has had a significant impact on our overall advertising revenue. In April, total advertising revenue declined 23% as compared to April 2019, and May to date is pacing down 35%.

Pantaya, our streaming platform in partnership with Lionsgate, has accelerated its strong growth trajectory in 2020, with approximately 750,000 subscribers as of today.

To maintain our solid financial position, we are managing expenses closely and cutting costs where possible without compromising on necessary programming and quality. In addition, as of the end of the quarter, we had $95 million in cash on hand and no near-term maturities. We have not pursued any share buybacks at this time and are deferring capital expenditures where possible.

Looking ahead, we believe we are taking the right steps to emerge from these challenges as a stronger and more agile company. We have withstood difficulty before, most recently in 2017 when we faced a generational natural disaster in Hurricane Maria. We confronted the headwinds, rose to the occasion, ensured that our viewers had the news and information they needed, and rebounded quickly to growth. We look forward to coming out of this period with opportunities to expand our market share and build upon our world-class assets."

For earnings history and earnings-related data on Hemisphere Media (HMTV) click here.

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