America Movil (AMX) Q1 Earnings Beat, Revenues Rise Y/Y
Mexican telecom behemoth America Movil S.A.B. AMX reported impressive financial results in the first quarter of 2017. Both the top line and the bottom line outpaced the Zacks Consensus Estimate.
Net income was $1,812 million, up a whopping 538% year over year. Quarterly earnings per ADR (American Depository Receipt) of 53 cents were significantly higher than the Zacks Consensus Estimate of 32 cents per ADR.
Total revenue of approximately $13,033 million highlighted an improvement of 5.3% on a year-over-year basis. Segment-wise, Services revenues were around $11,411.2 million, up 19% year over year. Equipment revenues totaled $1,622.4 million, up 14.6% year over year on growing demand for smartphones and tablets.
Total cost and expenses in the first quarter increased 19.5% year over year to $9,505.5 million. Quarterly EBITDA improved 15.8% year over year to $3,528 million. However, EBITDA margin was 27.1% compared with 27.7% in the year-ago quarter.
Liquidity
At the end of the first quarter of 2017, America Movil had around $3,069.7 million of cash and marketable securities compared with $3,935 million at the end of 2016. At the end of the reported quarter, total debt was around $31,904.7 million compared with $35,673.2 million at 2016-end. The debt-to-capitalization ratio in first-quarter 2017 was 0.70, flat with 2016-end figure.
Subscriber Statistics
As of Mar 31, 2017, America Movil's total subscriber count was approximately 362.7 million down 0.7% year over year. Total wireless subscriber base was 279.818 million, down 1.4% year over year. In the reported quarter, the company added a net 632,000 postpaid wireless customers but lost a net 1.4 million prepaid customers. Fixed-line revenue generating units were 82.84 million, up 1.8% year over year. Broadband accesses lines were up 6.4% after connecting 258,000 customers in the reported quarter.
Prime Regional Segments Results
Quarterly revenues from Mexico, America Movil's home ground, decreased 2.1% year over year to $3,130.1 million. EBITDA declined 12.6% to $998.4 million. Mexican ARPU (average revenue per user) decreased 2.3% year over year to $6.365 while the churn rate was 4.2%, compared with 4.1% in the prior-year quarter.
Revenues from Brazilian operation are down 0.5% year over year to $445.3 million. EBITDA increased 5% to $123.8 million. Meanwhile, Brazilian ARPU came in at $4.35, up 8.3% year over year while the churn rate was 3.4% compared with 3.6% in the year-ago quarter.
Revenues from America Movil's U.S. operation (Tracfone) increased 13.1% year over year to $1,985 million. EBITDA improved a substantial 30.4% to $211 million. ARPU rose 11.2% year over year to $23, while the churn rate was 5.4% compared with 4.3% in the year-ago quarter.
America Movil, S.A.B. de C.V. Price, Consensus and EPS Surprise
America Movil, S.A.B. de C.V. Price, Consensus and EPS Surprise | America Movil, S.A.B. de C.V. Quote
America Movil is facing intense competitive pressure from big telecom operators like Telefonica SA TEF and AT&T Inc. T in Mexico who are gradually expanding their foothold in the market. Further, Mexico’s telecom regulatory authority granted permission to cable TV and media giant Grupo Televisa SA TV to start wireless operations in the region. However, the company is yet to take any decision in this regard. America Movil currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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