) reported second-quarter 2013 earnings per ADR of 31 cents,
missing the Zacks Consensus Estimate of 43 cents. However, the
results increased 21.7% from 25 cents earned in the year-ago
Total revenue of MXN$194.8 billion ($15.6 billion) improved
1.6% year over year and was slightly above the Zacks Consensus
Estimate of $15.1 billion. Excluding the negative impacts of
currency fluctuations, total revenue grew 10.0% on strong
contributions from key markets across the globe.
revenues were MXN$174.3 billion ($14 billion), down 0.6% year
over year on currency fluctuations. However, excluding the
impact, service revenues grew 7.8% driven by mobile data services
and PayTV. Within this wireless service revenues segment, mobile
data revenues rose 17.4%.
revenues were MXN$20.5 billion ($1.6 billion), up 25.6% year over
year on the growing demand for smartphones and tablets.
Total costs and expenses in the reported quarter increased
3.5% year over year to MXN$129.8 billion ($10.4 billion).
Quarterly EBITDA dropped 2.1% year over year to MXN$65.0
billion ($5.2 billion). EBITDA margin dropped 120 basis points
year over year to 33.4% due to increased costs associated with
the networks in Mexico and Brazil along with higher costs related
to infrastructural development of wireless and wireline bases due
to increasing post-paid and PayTV subscribers.
America Movil's total subscriber base reached 328.8 million in
Jun 2013, up 5% year over year. Of the total, wireless and
fixed-line subscribers were 262 million and 66.8 million,
representing year-over-year growth of 4.1% and 9.1%,
Results by Prime Regional Segments
Quarterly revenues from Mexico, America Movil's home ground,
grew 4.7% year over year to MXN$69.6 billion ($5.4 billion).
Mexican ARPU (average revenue per user) decreased 2.5% and the
churn rate deteriorated 0.1% year over year.
Revenues from the Brazilian operation climbed 8.0% year over
year to BRL8.1 billion ($3.9 billion). Brazilian ARPU fell 5.3%,
while churn rate improved 0.4% year over year.
America Movil's U.S. operation (Tracfone) saw a 37.3%
year-over-year growth in revenues to reach $1.5 billion. ARPU
increased 19.2% year over year, while the churn rate remained
flat year over year.
At the end of the second quarter, America Movil had around
MXN$31.5 billion ($2.5 billion) of cash and cash equivalents
compared with MXN$45.5 billion ($3.6 billion) as of Dec 31, 2012.
Long-term debt was around MXN$401.1 billion ($32.2 billion)
compared with MXN$404.0 billion ($31.9 billion) at the end of
The company's capital expenditure in the quarter netted
MXN$49.1 billion ($3.9 billion) in the quarter. Shares worth
MXN$46.2 billion ($3.7 billion) were bought back.
We believe America Movil has a strong grip over the Latin
American wireless market with 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 with other firms will
likely enhance its networks 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
the unstable economic conditions, regulatory issues, high
spending associated with promotional activity and stiff
competition from carriers like
NII Holdings Inc.
America Movil has a Zacks Rank #3 (Hold).
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