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America Movil (AMX) Q3 Earnings Miss, Revenues Fall Y/Y

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America Movil, S.A.B. de C.V. AMX reported mixed third-quarter 2021 results, wherein the bottom line lagged the Zacks Consensus Estimate but the top line beat the same.

Amid worldwide supply chain disruptions, the market consensus is shifting in favor of the Federal Reserve. Other monetary authorities are progressing rapidly than anticipated to ease the expansion of the monetary base, thereby setting the base for interest rates to rise. The company is expecting to benefit from the significant economic recovery in the United States with signs of strong foreign exchange across financial markets.

Bottom Line

Net income in the September quarter was Mex$15,811 million or Mex$0.24 per share compared with Mex$18,902 million or Mex$0.28 per share in the year-ago quarter. The year-over-year deterioration was mainly due to top-line contraction.

The company had a comprehensive financing cost of MxP25.1 billion compared with the year-earlier quarter figure of MxP22.4 billion, due to foreign exchange loss.

Quarterly net income per ADR came in at 24 cents compared with 26 cents in the prior-year quarter. The bottom line missed the Zacks Consensus Estimate by 8 cents.

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. Price, Consensus and EPS Surprise

America Movil, S.A.B. de C.V. price-consensus-eps-surprise-chart | America Movil, S.A.B. de C.V. Quote

Revenues

Despite a strong demand for broadband services, quarterly total revenues dipped 2.6% to MxP253,375 million ($12,654.3 million). This was primarily due to lower service and equipment revenues.

Service revenues were MxP211,482 million ($10,562 million), down 2.1% year over year. Equipment revenues totaled MxP39,978 million ($1,996.6 million), down 6.2%. The top line surpassed the consensus estimate of $12,370 million.

On the fixed-line platform, America Movil gained 57,000 new revenue generating units, with 252,000 broadband accesses. The company added 4.2 million wireless subscribers in the third quarter. Brazil, Colombia, and Peru were the primary contributors for higher postpaid subscribers. In the case of prepaid, Mexico, Brazil, and Argentina played a vital role.

The telco operates in multiple regions, namely — Mexico, Argentina, Brazil, Colombia, Chile, Ecuador, Peru, Central America, Caribbean, Austria, and the United States. Out of these, Peru witnessed year-over-year revenue growth of 24.4% to 1,567 million soles ($384.9 million). The robust performance was driven by higher service and equipment revenues.

Ecuador’s revenues fell 4.5% to $254 million from $266 million in the year-ago quarter owing to declining service revenues amid a challenging economic environment.

Other Quarterly Details

Total expenses were MxP165,784 million, down 4.6% from MxP173,711 million recorded in the year-ago quarter. Overall, EBITDA improved 1.3% from the prior-year quarter to MxP87,590 million. The EBITDA margin came in at 34.6% compared with 33.2% in the year-earlier quarter on the back of foreign exchange gains along with strong performance across Mexico, Central America, Peru, and the Dominican Republic.

Liquidity

As of Sep 30, 2021, America Movil had MxP98,242 million ($4,782.2 million) in cash, marketable securities and other short-term investments with MxP438,618 million ($21,351 million) of long-term debt.

Zacks Rank & Stocks to Consider

America Movil currently has a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the broader industry are Clearfield, Inc. CLFD, Motorola Solutions, Inc. MSI, and Ubiquiti Inc. UI. While Clearfield currently sports a Zacks Rank #1 (Strong Buy), Motorola and Ubiquiti carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Clearfield delivered a trailing four-quarter earnings surprise of 49%, on average.

Motorola delivered a trailing four-quarter earnings surprise of 9.6%, on average.

Ubiquiti delivered a trailing four-quarter earnings surprise of 20.5%, on average.

Conversion rate used:

MxP1 = $0.049943 (period average from Jul 1, 2021 to Sep 30, 2021)

MxP1 = $0.048678 (as of Sep 30, 2021)

1 Peruvian Sol = $0.245633 (period average from Jul 1, 2021 to Sep 30, 2021)


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