America Movil (AMX) Posts Q4 Loss, Revenues Miss Estimates

America Movil S.A.B. (NYSE:AMX) , reported disappointing financial results in the fourth quarter of 2017 wherein both the top and bottom line lagged the Zacks Consensus Estimate.

Net loss was $596 million, up a whopping 98% year over year. Quarterly loss per ADR (American Depository Receipt) of 16 cents was in contrast with the Zacks Consensus Estimate of earnings of 14 cents.

America Movil, S.A.B. de C.V. Price, Consensus and EPS Surprise

Total revenues of approximately $13,917 million highlighted a decrease of 2% on a year-over-year basis missing the Zacks Consensus Estimate of $14,275 million. Segment-wise, Services revenues were around $11,653.5 million, down 1.2% year over year. Equipment revenues totaled $2,265 million, down 6.3% year over year.

Total cost and expenses in the fourth quarter decreased 4.9% year over year to $10,218 million. Quarterly adjusted EBITDA improved 6.8% year over year to $3,700.5 million. EBITDA margin was 26.6% compared with 24.4% in the year-ago quarter.

Liquidity

At the end of 2017, America Movil had around $4,398.9 million of cash and marketable securities compared with $3,935 million at the end of 2016. At the end of 2017, total debt was around $36,813.4 million compared with $35,673.2 million at 2016-end. The debt-to-capitalization ratio at the end of 2017 was 0.71 compared with 0.70 at the end of 2016.

Subscriber Statistics

As of Dec 31, 2017, America Movil's total subscriber count was approximately 362 million, flat year over year. Total wireless subscriber base was 279.013 million, down 0.6% year over year. Fixed-line revenue generating units were 82.844 million, down 0.1% year over year. Within this segment, wireline access line was 33.3 million. Broadband access lines were 27.5 million, up 5.7% year over year and Pay-TV units were 21.8 million, down 0.8% year over year.

In the reported quarter, America Movil added a net 1,680,000 postpaid customers. The company gained 565,000 postpsid subscribers but lost 350,000 prepaid customers. It gained 321,000 broadband connections but lost 278,000 pay-TV ones.

Prime Regional Segments Results

Quarterly revenues from Mexico, America Movil's home ground, decreased 0.9% year over year to $3,800 million. EBITDA increased 13.5% to $1,218.4 million. Mexican ARPU (average revenue per user) increased 7.2% year over year to $7.500 while the churn rate was 4.5% compared with 4.9% in the prior-year quarter.

Revenues from Brazilian operation are up 0.8% year over year to $2,770.5 million. EBITDA increased 11.6% to $833.6 million. Meanwhile, Brazilian ARPU came in at $4.96, up 10.2% year over year while the churn rate was 4.7% compared with 5.5% in the year-ago quarter.

Revenues from America Movil's U.S. operation (Tracfone) decreased 8.3% year over year to $1,939 million. EBITDA decreased 26.4% to $54.6 million. ARPU rose 2.4% year over year to $24, while the churn rate was 4.6% compared with 4.7% in the year-ago quarter.

America Movil has a Zacks Rank #4 (Sell). The company is facing intense competitive pressure from big telecom operators like Telefonica SA (NYSE:T) and AT&T Inc. (NYSE:T) in Mexico, who are gradually expanding foothold in the market.

Further, Mexico’s telecom regulatory authority granted permission to Grupo Televisa SA (NYSE:T) to start wireless operations in the region. However, the company is yet to take any decision in this regard. While Televisa has a Zacks Rank #4, both AT&T and Telefonica carry a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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