America Movil (AMX) Q1 Earnings & Revenues Miss Estimates

America Movil, S.A.B. de C.V. AMX reported tepid first-quarter 2021 results, wherein both the top line and the bottom line missed their respective Zacks Consensus Estimate.

Notably, economic expansion in the United States had gained momentum in the second half of 2020, a trend that persisted in the March quarter as well. Confidence levels further shot up with the news of a second fiscal stimulus plan and new infrastructure program, fueled by solid progress on vaccination.

However, various Latin American countries are bearing the brunt of sluggish economic activity resulting from new COVID waves that have led to renewed confinements and constrained mobility.

Bottom Line

Net income in the March quarter was Mex$1,810 million or Mex$0.03 per share against net loss of Mex$28,862 million or a loss of Mex$0.44 per share in the year-ago quarter. The drastic year-over-year improvement was primarily driven by lower operating expenses.

The company had a comprehensive financing cost of MxP35.8 billion, down 54.6% from the year-earlier quarter’s figure of MxP79 billion.

Quarterly net income per ADR came in at 3 cents against net loss per ADR of 45 cents in the prior-year quarter. The bottom line missed the Zacks Consensus Estimate by 30 cents.

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

America Movil, S.A.B. de C.V. price-consensus-eps-surprise-chart | America Movil, S.A.B. de C.V. Quote

Revenues

Despite strong demand for broadband services, quarterly total revenues of MxP248,186 million ($12,197.1 million) were almost flat year over year, accompanied with lower service and equipment revenues.

Service revenues were MxP207,109 million ($10,178 million), down 1.1% year over year. Equipment revenues totaled MxP39,216 million ($1,927 million), down 0.7%. The top line, too, lagged the consensus estimate of $12,445 million.

America Movil ended the quarter with 374 million access lines, 246,000 broadband clients on the fixed-line platform and added 6 million wireless subscribers. Markedly, Brazil, Mexico and Colombia were the primary contributors.

The telco operates in multiple geographic regions, namely — Mexico, Argentina, Brazil, Colombia, Chile, Ecuador, Peru, Central America, Caribbean and United States. Out of these territories, Peru witnessed a year-over-year revenue growth of 11.5% to 1,443 million soles ($391.4 million). The impressive performance was driven by higher service and broadband revenues.

Meanwhile, Ecuador’s revenues plunged 17.4% to $253 million, owing to declining service revenues and rough economic scenario. Also, the revenues of its subsidiary, A1 Telekom Austria Group, inched up 0.8% to €1,136 million ($1,369.2 million), driven by higher service revenues.

Other Quarterly Details

Total expenses were MxP166,529 million, down 3.4% from MxP172,474 million recorded in the year-ago quarter. Overall, EBITDA improved 5.2% from the prior-year quarter to MxP81,656 million. The EBITDA margin came in at 32.9% compared with 31% in the year-earlier quarter on the back of strict cost controls across all markets.

Liquidity

As of Mar 31, 2021, America Movil had MxP118,967 million ($5,798.8 million) in cash, marketable securities and other short-term investments, with MxP526,117 million ($25,644.5 million) of long-term debt.

Zacks Rank & Other Stocks to Consider

America Movil currently sports a Zacks Rank #1 (Strong Buy).

A few other top-ranked stocks in the broader industry are Cambium Networks Corporation CMBM, Clearfield, Inc. CLFD and CommScope Holding Company, Inc. COMM, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cambium delivered a trailing four-quarter positive earnings surprise of 128%, on average.

Clearfield delivered a trailing four-quarter positive earnings surprise of 79.8%, on average.

CommScope delivered a trailing four-quarter positive earnings surprise of 41.1%, on average.

Conversion rate used:

MxP1 = $0.049145 (period average from Jan 1, 2021 to Mar 31, 2021)

MxP1 = $0.048743 (as of Mar 31, 2021)

1 Peruvian Sol = $0.271231 (period average from Jan 1, 2021 to Mar 31, 2021)

€1 = $1.205309 (period average from Jan 1, 2021 to Mar 31, 2021)

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