(Updates share price in sixth paragraph.)
Oct. 28 (Bloomberg) -- America Movil SAB, the largest mobile-phone carrier in the Americas, said third-quarter profit fell as the company spent more to install fiber-optic technology in its two biggest markets, Mexico and Brazil.
Net income dropped 21 percent to 18.7 billion pesos ($1.43 billion) from 23.7 billion pesos a year earlier, Mexico City- based America Movil said yesterday. Sales rose 7.9 percent to 167.3 billion pesos. Foreign-exchange losses also cut into profit.
America Movil, controlled by billionaire Carlos Slim, is combining its wireless infrastructure across Latin America with fixed-line networks it acquired last year to stay ahead of Madrid-based Telefonica SA. The Mexican company seeks to boost the speed and quality of its Internet connections as more people in the region snap up smartphones and tablet computers.
The Mexican division’s profit fell 2.7 percent from a year earlier to 32 billion pesos, with the margin dropping to 50.4 percent from 53.1 percent, excluding interest, taxes, depreciation and amortization. Mexico’s telecommunications regulatory agency earlier this year reduced the fees America Movil’s rivals have to pay to connect their customers’ calls to its network, hurting earnings.
In addition to higher costs for fiber-optic technology, America Movil spent more in Mexico to sign up customers and to acquire handsets for its service. In Brazil, expenses rose on purchases of content for its pay-TV networks and on new customer-service call centers.
America Movil rose 1.5 percent to 17.19 pesos at the close in Mexico City. The shares are down 3.1 percent this year.
Brazilian profit fell 7.3 percent from a year earlier to 1.5 billion reais ($877 million), excluding interest, taxes, depreciation and amortization. Profit margin on that basis declined to 26.2 percent from 30.3 percent.
America Movil recorded a 22.2 billion-peso loss on foreign exchange, a non-cash charge reflecting the value of its debt in foreign currency, compared with a 62 million-peso gain a year earlier. The loss helped lower profit to 24 centavos a share from 29 centavos a year earlier.
The peso slid 16 percent against the dollar between June 30 and Sept. 30, the second-worst performer among Latin America’s top currencies after Brazil’s real.
America Movil added 5.5 million subscribers, compared with the 5.64 million estimate of Christopher King, an analyst at Stifel Nicolaus & Co. in Baltimore.
--Editors: Donna Alvarado, John Lear
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