America Movil Profit Climbs 38% as Brazilians Sign Up for TV
America Movil SAB (AMXL), the biggest mobile-phone carrier in the Americas, said first-quarter profit rose 37 percent as more Brazilian customers signed up for satellite and cable television service.
Net income climbed to 32.6 billion pesos ($2.5 billion), or 42 centavos a share, from 23.7 billion pesos, or 30 centavos, a year earlier, the Mexico City-based company said yesterday. Sales increased 12 percent to 192.5 billion pesos, beating the 182 billion-peso average of seven analyst estimates compiled by Bloomberg.
America Movil, controlled by billionaire Carlos Slim, is combining its Brazilian divisions to offer packages of TV, wireless service, home-phone and Internet to lure customers from Telefonica SA. (TEF) Slim’s company spent $2.7 billion last year to boost its stake in Net Servicos de Comunicacao SA (NETC4), Brazil’s biggest cable-TV carrier, to more than 90 percent.
“It’s a fairly low-penetrated business that has long-term growth potential,” Christopher King, an analyst at Stifel Nicolaus & Co. in Baltimore, said of pay TV in Latin America. “It shows the initial impact they’ve had with their bundling effort there.” He rates America Movil shares hold.
Net Servicos shareholders voted this month to delist the company’s stock, and America Movil Chief Executive Officer Daniel Hajj said in October the company would begin consolidating the cable carrier into its financial statements.
America Movil added 4.2 million mobile-phone subscribers since December, compared with the 3.93 million estimate of Vera Rossi, a Barclays Plc analyst in New York, who rates the shares the equivalent of buy. Satellite and cable TV subscriptions increased 33 percent from a year earlier to 14 million, including 10.6 million in Brazil.
The shares rose 0.1 percent to 16.61 pesos yesterday in Mexico City. They have gained 5 percent this year.
An appreciation in Latin American currencies, including the Mexican peso, gave America Movil a foreign-exchange gain of 19.3 billion pesos, more than quadruple the year-earlier result.
Leaving out that item, along with interest, taxes, depreciation and amortization, the profit measure known as Ebitda rose 6.3 percent to 67.5 billion pesos. America Movil’s profit margin, leaving out those items, fell to 35.1 percent from 37.1 percent on wireless competition in Brazil and handset subsidies in Mexico.
(America Movil plans to hold a conference call at 10 a.m. New York time. To listen, call +1-888-430-8690 from the U.S. or +1-719-457-2088 outside the U.S. and use the passcode 9504777.)
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