Is Latin America on the mend? Earning season can be a
tough time trading for anyone looking at short term position but
for emerging market investors it can be time to gain insight to
emerging market economies.
One such earning report shedding light onto Latin America (
) is Mexican telecommunications company America Movil SAB (
). When AMX reported yesterday it revenue increase (1.6%)
was greatly helped by an improving economy in Latin America
AMX reported a net profit of 14.2 billion pesos or roughly
$1.1 billion USD in the second quarter this year or $0.31 per
share for ADR traded on U.S. exchanges. A 7.9% increase
quarter over quarter with EBITDA of 2.1%.
In AMX earnings release - AMX also highlighted that U.S.
economy appears to be approving along with the pickup in Latin
America. It goes on to pointing out markets are concerned
over a reduction in U.S. bond purchases by the U.S. Federal
Reserve caused weaker currencies in Latin America helped its
service revenue to climb by 7.8%.
AMX provides us a broad look into consumers in 18 countries
across the Americas. Were it increased its subscriber base
by 1.6 million. It also reported where it had a reduction
of 867K in wireless subscribers by disconnecting inactive
consumers. The reduction was primarily in Peru and Ecuador
indicating a deeper look into these economies before jumping into
these emerging markets.
Although AMX earnings seem to improving on the surface we
AMX's debt to total capital ratio being calculated at
61.97%. The debit ratio seems high but is inline with the
wireless telecommunication services sector's norm. A Quick ratio
comes in at 0.67 which means there are not enough liquid assets
to satisfy current debt levels if operating earnings were to fall
AMX is not a name I'm looking to jump into but find its increase
revenue in Latin America an area to dig deeper into over the