Axtel, Maxcom Drop on Slim Phone Competition: Mexico City Mover
Mexican phone carriers Axtel (AXTELCPO) SAB and Maxcom Telecomunicaciones SAB dropped in Mexico City trading after reporting sales declines amid increased competition from billionaire Carlos Slim.
Axtel, Mexico’s second-largest phone company, fell 7.5 percent to 3.56 pesos at the close, the biggest decline in six months and the lowest price since its 2005 initial public offering. Maxcom, partly owned by Bank of America Corp., slid 5.2 percent to 2.93 pesos, the biggest drop since Feb. 14.
Slim’s America Movil SAB, Mexico’s largest phone carrier, cut prices on international phone traffic, hurting Axtel’s sales, Felipe Canales, the smaller company’s chief financial officer, said in an April 27 conference call. Axtel’s first- quarter revenue fell 6 percent from a year earlier to 2.5 billion pesos ($192 million).
Maxcom (MAXCOMCP)’s first-quarter sales slid 7.1 percent to 547.3 million pesos, the company reported April 27 after the close of trading. That included a 5 percent decline in wholesale revenue to 103 million pesos, which Maxcom attributed to price cuts from competition.
“Maxcom reported first-quarter results below our expectations, which may pressure the share prices in the short term,” Alexandre Garcia, an analyst at Citigroup Inc., wrote in a research note dated today. While the company missed Citigroup’s estimate of sales of 552 million pesos, Garcia recommended buying the shares because they are trading at the company’s “liquidation value,” he said.
Bank of America controls a 40.5 percent stake in Maxcom.
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