) reported fourth-quarter 2013 earnings per ADR of 37 cents,
missing the Zacks Consensus Estimate of 44 cents. However, the
results improved 23% from 30 cents earned in the year-ago
Total revenue of MXN$204.1 billion ($15.6 billion) in the
fourth quarter improved 3.1% year over year and was above the
Zacks Consensus Estimate of $15 billion. Total revenue for the
full year grew 1.4% year over year to MXN$786.1 billion ($61.6
Segment wise, Services revenues were MXN$178.2 billion ($13.7
billion), up 0.8% year over year. Equipment revenues were
MXN$25.9 billion ($2 billion), up 22.5% year over year on growing
demand for smartphones and tablets.
Total costs and expenses in the reported quarter increased
3.8% year over year to MXN$140.6 billion ($10.8 billion).
Quarterly EBITDA grew 1.4% year over year to MXN$63.5 billion
($4.9 billion). EBITDA margin dropped 50 basis points year over
year to 31.1%.
For the full year, total costs and expenses increased 3.9%
year over year to MXN$530.4 billion ($41.6 billion). EBITDA fell
3.4% year over year to MXN$255.7 billion ($20 billion). EBITDA
margin fell 170 basis points year over year to 32.5%.
America Movil's total subscriber base reached 339 million in
Dec 2013, up 4.2% year over year. Of the total, wireless and
fixed-line subscribers were 270 million and 69 million,
representing year-over-year growth of 3.2% and 8.2%,
Results by Prime Regional Segments
Quarterly revenues from Mexico, America Movil's home ground,
grew 2.3% year over year to MXN$71.6 billion ($5.5 billion).
Mexican ARPU (average revenue per user) decreased 4.5% year over
year to MXN$165.00 ($12.67) and the churn rate deteriorated 20
basis points year over year to 4.3%.
Revenues from the Brazilian operation climbed 10.9% year over
year to BRL 8.8 billion ($3.9 billion). Brazilian ARPU remained
flat year over year at BRL 16.00 ($7.03) while churn rate
improved 10 basis points year over year to 3.6%.
America Movil's U.S. operation (Tracfone) saw 13.8%
year-over-year growth in revenues to $1.5 billion. ARPU increased
9.3% year over year, while the churn rate improved 30 basis
points year over year to 3.6%.
At the end of the fourth quarter, America Movil had around
MXN$48.2 billion ($3.8 billion) of cash and cash equivalents
compared with MXN$45.5 billion ($3.6 billion) as of Dec 31, 2012.
Total long-term debt was around MXN$464.5 billion ($36.4 billion)
compared with MXN$404.0 billion ($31.9 billion) at the end of
2012. The company's capital expenditure netted MXN$129.6 billion
We believe America Movil has a strong grip over the Latin
American wireless market thanks to consistent subscriber growth.
Increased penetration of 4G mobile services and a competitive
pricing policy are expected to boost the company's growth.
Further, America Movil is concentrating on expanding the PayTV
platform, which remains one of its highest revenue contributors.
America Movil's various collaborations will likely enhance its
network within Latin America as well as in offshore key markets
such as Asia and the Middle East. Nevertheless, we prefer to stay
on the sidelines considering unstable economic conditions,
regulatory issues, high spending associated with promotional
activity and stiff competition from carriers like
Telefonica Brasil, S.A.
and NII Holdings Inc.
Currently, America Movil has a Zacks Rank #2 (Buy).
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