America Movil Likely To Miss In Second Quarter

After market closed on Thursday, America Movil (AMXL: MM) reported slightly unsatisfactory results. EPS of MXN 0.21/L was to some extent ahead of our MXN 0.20 projection in spite of a 1.4% miss on EBITDA. America Movil S.A.B. de C.V. AMX reported second-quarter 2015 earnings per ADR (American Depository Receipt) of 27 cents, well below the Zacks Consensus Estimate of 41 cents. The figure also showed a 35.7% decline from 42 cents earned in the year-ago quarter. Meanwhile, total revenue of $14,366 million in the quarter declined 0.1% year over year.

The company’s results have been hurt by the adverse foreign exchange rate movement, especially the depreciation of the Brazilian real against the U.S. dollar. Notably, Brazil is at present the second largest market for America Movil providing the maximum growth opportunity. The company currently carries a Zacks Rank #3 (Hold).

Segment-wise, Services revenues were around $12,656 million, down 1.6% year over year. Equipment revenues totaled $1,710 million, up 12.6% year over year on growing demand for smartphones and tablets.

Total costs and expenses in the reported quarter increased 2.3% year over year to $9,904 million. Quarterly EBITDA declined 5% year over year to $4,462 million. EBITDA margin stood at 31.1% compared with 32.6% in the year-ago quarter.

America Movil’s total subscriber count stood at 367.7 million at the end of Jun 30, 2015, up 1.4% year over year. This figure includes 288.8 million wireless subscribers, 34.6 million landlines subscribers, 22.8 million broadband accesses and 21.5 million pay-TV units.

Quarterly revenues from Mexico, America Movil’s home ground, declined 2.4% year over year to $4,444.3 million. On the other hand, EBITDA fell 7.5% to $1,841.2 million. Mexican ARPU (average revenue per user) decreased 8.2% year over year to $10.1 while the churn rate stood at 3.7%, in comparison with 4.8% in the second quarter of 2014.

Revenues from Brazilian operations climbed 2.5% year over year to $2,957.7 million. EBITDA increased 10.4% to $810.7 million. Meanwhile, Brazilian ARPU declined 12.6% year over year to $4.2 while churn rate stood at 3.4%, flat year over year.

America Movil’s U.S. operation (Tracfone) revenues declined 1.2% year over year, reaching the number to $1,691 million. EBITDA decreased 5.2% to $197 million. ARPU came in at $20, flat year over year, while churn rate rose by 20 basis points to 4.7%.

About

Jim Traverso, MBA, is research analyst and reports Services, Financial & REIT and Energy & Utilities sectors. Prior joining Equities Mogul, Jim Traverso worked with Goldman Sachs Research. If you have a great story idea for Jim Traverso, you can write at [jim.traverso@equitiesmogul.com ].

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