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America Movil (AMX) Misses on Q4 Earnings and Revenues

America Movil S.A.B. de C.V.AMX reported fourth-quarter 2015 earnings per ADR (American Depository Receipt) of 28 cents, significantly below the Zacks Consensus Estimate of 43 cents. For the first time the company's profit margin in Mexico, its biggest market, fell below the level of 40% (to 36.7%) in the reported quarter. Stringent regulatory measures and intensifying competition in Mexico were the primary reasons responsible for the poor performance.

Nevertheless, America Movil's foreign exchange rate losses were down a whopping 86.4% sequentially as the Mexican Peso, the Brazilian Real and the Colombian Peso showed very slight depreciation with respect to the U.S. dollar in the reported quarter.

Meanwhile, total revenue of approximately $13,443 million in the reported quarter rose marginally 0.6% on a year-over-year basis. However, the top line failed to meet the Zacks Consensus Estimate of $13,616 million. Segment-wise, Services revenues were around $11,340 million, down 1.5% year over year. Equipment revenues totaled $2,103 million, up 13.2% year over year on growing demand for smartphones and tablets.

Total costs and expenses in the fourth quarter increased 2.9% year over year to $9,719 million. Quarterly EBITDA declined 5.1% year over year to $3,724 million. EBITDA margin stood at 27.7% compared with 29.4% in the year-ago quarter.

Liquidity

At the end of 2015, America Movil had around $5,918 million of cash and marketable securities compared with $4,430 million at the end of 2014. Total debt, at the end of 2015 was around $39,853 million against $35,650 million at the 2014-end. The debt-to-capitalization ratio at 2015-end was 0.77 compared with 0.70 at 2014-end.

Subscriber Statistics

America Movil's total subscriber count was approximately 367 million as of Dec 31, 2015, down 0.3% year over year. This figure includes about 286 million wireless subscribers, 35 million landlines, 24 million broadband accesses and 22 million pay-TV units.

Results by Prime Regional Segments

Quarterly revenues from Mexico, America Movil's home ground, declined 0.5% year over year to $4,228 million. On the other hand, EBITDA fell 14.2% to $1,553 million. Mexican ARPU (average revenue per user) decreased 6.3% year over year to $8.69 while the churn rate stood at 4.5%, in comparison with 4.3% in the fourth quarter of 2014.

Revenues from Brazilian operations dropped 1.2% year over year to $2,347 million. EBITDA increased 6.7% to $628 million. Meanwhile, Brazilian ARPU declined 12.2% year over year to $3.31 while churn rate stood at 5.1% compared with 3.2% in the year-ago quarter.

America Movil's U.S. operation (Tracfone) revenues remained unchanged year over year at $1,756 million. EBITDA decreased 7.5% to $77 million. ARPU came in at $20, flat year over year, while churn rate rose by 10 basis points to 4.1%.

Stocks to Consider

America Movil currently carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks in this sector include Fairpoint Communications Inc. FRP , NTT DOCOMO Inc. DCM , and KT Corp. KT . All these stocks hold a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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