), the largest telecom carrier in Latin America, has reported
fourth-quarter earnings per ADR of 30 cents. The results missed
the Zacks Consensus Estimate of 50 cents and were slightly below
31 cents earned in the year-ago quarter.
Total revenue was MXN$198.0 billion ($15.1 billion), down 1.1%
year over year but above the Zacks Consensus Estimate of $14.9
billion. The decline was primarily due to unfavorable exchange
rate fluctuations. Excluding this impact, total revenue was up
5.8% year over year.
Total revenue for the year increased 6.0% year over year to
MXN$775.1 billion ($60.0 billion).
revenues were MXN$176.8 billion ($13.7 billion), down 2.1% year
over year on currency fluctuations. However, excluding the
impact, service revenues grew 5.2% driven by mobile data services
and PayTV. Within this wireless service revenues segment, data
revenues rose 33.3% while Mobile voice revenues dipped 1.7%.
Pay TV revenues increased 20% year over year on subscriber
growth. Fixed-line voice revenues declined 7.2% year over
revenue was MXN$21.2 billion ($1.6 billion), up 8.2% year over
year on the growing demand for smartphones.
Total costs and expenses in the reported quarter were up 2.4%
year over year at MXN$136.4 billion ($10.5 billion). On a
year-over-year basis, other costs, cost of equipment and selling,
general and administrative expenses increased 47.6%, 5.6% and
2.8%, respectively. However, the cost of service declined 0.6%
year over year.
Total cost for 2012 increased 9.0% year over year to MXN$514.2
billion ($39.1 billion) based on 16.2%, 13.4%, 8.3% and 5.4% rise
in cost of equipment, other costs, cost of service and , selling,
general and administrative expenses, respectively.
Quarterly EBITDA fell 8.0% year over year to MXN$61.7 billion
($4.8 billion). EBITDA margin dropped 240 basis points year over
year to 31.1% due to increased costs associated with the
infrastructural development of wireless and wireline networks in
Mexico and Brazil along with the related costs of increasing
post-paid and PayTV subscriber bases.
For 2012, EBITDA increased 0.4% year over year to MXN$260.9
billion ($19.9 billion) but EBITDA margin dropped 180 basis
points to 33.7%.
America Movil's total subscriber base reached 326 million in
December 2012, up 8.7% year over year. Within this, wireless and
fixed-line subscribers were 262 million and 64 million,
respectively, increasing 8.2% and 10.8% year over year.
Results by Key Markets
Quarterly revenues from Mexico, America Movil's home turf,
climbed 0.5% year over year to MXN$70 billion ($5.4 billion).
Mexican ARPU (average revenue per user) increased 2.6% and the
churn rate declined 2.0% year over year.
Revenues from the Brazilian operation climbed 3.3% year over
year to BRL7.9 billion ($3.8 billion) in the fourth quarter.
Brazilian ARPU and churn rate fell 12.3% and 0.3%,
America Movil's U.S. operation (Tracfone) saw a 30.8%
year-over-year growth in fourth quarter revenues to reach $1.4
billion. U.S. ARPU increased 14.9% year over year, while the
churn rate dropped 0.2% year over year.
At the end of 2012, America Movil had around MXN$45.5 billion
($3.5 billion) of cash and cash equivalents compared with
MXN$64.5 billion ($5.2 billion) as of December 31, 2011. Total
long-term debt was around MXN$404.1 billion ($30.8 billion)
compared with MXN$368.0 billion ($29.7 billion) at year-end
Cellcom Israel Ltd.
), which has a Zacks Rank #1 (Strong Buy) is another stock in
this sector worth considering.
We believe that continued demand in wireless data and PayTV
services and a growing subscriber base, in particular post-paid
users, bode well for the company's profitability. The company
launched 4G services in Mexico in 2012, providing market share
gains and a competitive advantage.
Despite being the undisputed market leader in the Latin
American telecom market, America Movil remains highly exposed to
competitive threats from Brazilian and Mexican rivals like
). Additionally, regulatory issues across the company's major
markets, reduced MTRs and subsidies over handsets could be
detrimental to its future growth.
America Movil has a Zacks Rank #3 (Hold).
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