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America Movil Misses Q2 Earnings Estimates on Forex Woes - Analyst Blog

America Movil S.A.B. de C.V.AMX reported second-quarter 2015 earnings per ADR (American Depository Receipt) of 27 cents, well below the Zacks Consensus Estimate of 41 cents. The figure also showed a 35.7% decline from 42 cents earned in the year-ago quarter. Meanwhile, total revenue of $14,366 million in the quarter declined 0.1% year over year.

The company's results have been hurt by the adverse foreign exchange rate movement, especially the depreciation of the Brazilian real against the U.S. dollar. Notably, Brazil is at present the second largest market for America Movil providing the maximum growth opportunity. The company currently carries a Zacks Rank #3 (Hold).

Segment-wise, Services revenues were around $12,656 million, down 1.6% year over year. Equipment revenues totaled $1,710 million, up 12.6% year over year on growing demand for smartphones and tablets.

Total costs and expenses in the reported quarter increased 2.3% year over year to $9,904 million. Quarterly EBITDA declined 5% year over year to $4,462 million. EBITDA margin stood at 31.1% compared with 32.6% in the year-ago quarter.

Subscriber Statistics

America Movil's total subscriber count stood at 367.7 million at the end of Jun 30, 2015, up 1.4% year over year. This figure includes 288.8 million wireless subscribers, 34.6 million landlines subscribers, 22.8 million broadband accesses and 21.5 million pay-TV units.

Results by Prime Regional Segments

Quarterly revenues from Mexico, America Movil's home ground, declined 2.4% year over year to $4,444.3 million. On the other hand, EBITDA fell 7.5% to $1,841.2 million. Mexican ARPU (average revenue per user) decreased 8.2% year over year to $10.1 while the churn rate stood at 3.7%, in comparison with 4.8% in the second quarter of 2014.

Revenues from Brazilian operations climbed 2.5% year over year to $2,957.7 million. EBITDA increased 10.4% to $810.7 million. Meanwhile, Brazilian ARPU declined 12.6% year over year to $4.2 while churn rate stood at 3.4%, flat year over year.

America Movil's U.S. operation (Tracfone) revenues declined 1.2% year over year, reaching the number to $1,691 million. EBITDA decreased 5.2% to $197 million. ARPU came in at $20, flat year over year, while churn rate rose by 20 basis points to 4.7%.

Liquidity

At the end of second quarter, America Movil had around $7,745.2 million of cash and marketable securities compared with $4,430 million at the end of 2014. Long-term debt, at the end of the second quarter of 2015, was around $38,212 million against $35,650 million at the end of 2014.

America Movil currently has a Zacks Rank #3 (Hold).

Stocks to Consider

Better-ranked stocks in this sector include RigNet, Inc. RNET , NTT DOCOMO, Inc. DCM , and Orange ORAN . All these stocks sport a Zacks Rank #1 (Strong 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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