Bloomberg News

America Movil Tops Sales Estimates as More Clients Use Data

October 26, 2012

America Movil SAB (AMXL), the biggest mobile-phone carrier in the Americas by subscribers, beat expectations for third-quarter sales as customers spent more on data services such as music downloads and Web browsing.

Revenue rose 4.5 percent to 192.8 billion pesos ($14.8 billion), beating the 188 billion-peso average of eight analysts’ estimates compiled by Bloomberg. Net income rose to 30.6 billion pesos, or 40 centavos a share, from 18.3 billion pesos, or 36 centavos, a year earlier, aided by currency gains.

America Movil, controlled by billionaire Carlos Slim, is pushing for more data customers to boost revenue per user as prices fall for traditional voice service on mobile phones. In Mexico, its largest market, the average user paid 179 pesos a month, up 9.6 percent from a year earlier.

“Mexico put up good numbers once again,” said Chris King, an analyst at Stifel Nicolaus & Co. in Baltimore, Maryland. “The economy’s held up there in the face of a soft U.S. economy, so the market as a whole is doing OK.” He has a hold rating on the shares.

Still, the company added fewer wireless subscribers than King expected. Its user base grew by 4.1 million to 255.9 million, short of the 4.5 million additions he had projected.

America Movil rose 0.6 percent to 16.70 pesos at the close in Mexico City. The shares have gained 5.6 percent this year.

The company recorded a foreign-exchange gain of 9.02 billion pesos, compared with a loss of 23.4 billion pesos a year ago. Leaving out that gain and other items, profit was 66.2 billion pesos, up 0.6 percent from last year, and margins fell to 34.4 percent from 35.7 percent.

TV Growth

America Movil’s fastest-growing business continued to be pay television, which it offers through cable and satellite units in countries including Brazil and Colombia. Video customers surged 26 percent to 15.8 million, helping America Movil retain its title as the largest pay-TV provider in Latin America.

Brazil, America Movil’s second-biggest market behind Mexico, continued to be a drag on results. The division’s profit margin slid to 24.1 percent from 25.1 percent a year ago. Monthly bills fell 16 percent even as voice traffic rose 14 percent, suggesting customers are paying less even as they use their phones more.

“Brazil’s still a train wreck,” said King of Stifel Nicolaus. “Until that gets better, it’s hard to see the stock really working well.”

In Mexico, where America Movil has 70 percent of mobile- phone subscribers, voice traffic surged 22 percent from a year earlier. The average price per minute fell 18 percent because of fee cuts mandated by regulators.

Telmex (TELMEXL), America Movil’s land-line unit in Mexico, continued to struggle to keep customers from switching to mobile providers or competitors such as cable companies. Its phone lines declined by 4.5 percent from a year earlier.

(America Movil will hold a conference call at 10 a.m. New York time to discuss the quarterly results. To listen, dial +1-857-350-1601 and provide passcode 96954855.)

To contact the reporter on this story: Crayton Harrison in Mexico City at tharrison5@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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