Yahoo Finance Amer Movil (AMX) Up 10.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Amer Movil (AMX). Shares have added about 10.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Amer Movil due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
America Movil's Q1 Earnings Decrease Y/Y
America Movil reported net income per ADR of 25 cents for first-quarter 2024, which decreased from 51 cents reported in the prior-year quarter.
Net income in the quarter was Mex$13,494 million or Mex$0.22 per share compared with Mex$30,146 million or Mex$0.48 per share in the year-ago quarter. The downtick was caused by the sale of towers by the Dominican Republic and Peru in the prior-year quarter.
The company had a comprehensive financing cost of Mex$13,708 million against the year-ago quarter’s comprehensive financing income of Mex$374 million.
Revenues
Total quarterly revenues decreased 2.7% to Mex$203,298 million due to poor performance in the Equipment business segment. Also, unfavorable foreign currency movements were headwinds.
Service revenues were Mex$170,890 million, up 1.1% year over year. Equipment revenues totaled Mex$29,963 million, down 4.1% year over year.
America Movil gained 1.5 million wireless subscribers in the first quarter. This figure includes 1.3 million postpaid subscribers. Brazil, Austria and Columbia were the primary contributors to the postpaid subscriber growth. The company had 311.6 million wireless subscribers at the first-quarter end.
On the fixed-line, Broadband and Television platforms, the company ended the quarter with 74.1 million revenue-generating units.
The telco operates in multiple regions, namely Mexico, Brazil, Colombia, Peru, Ecuador, Argentina, Central America, the Caribbean, Austria and Other European countries.
Of these countries, Peru witnessed a year-over-year revenue decline of 33.4% to 1,607 million Soles. The downtick was driven by lower equipment revenues.
Argentina’s revenues came in at ARS 305,412 million, down 16.6% from the year-ago quarter. The downside was caused by declining service, equipment lines and wireless revenues. The reported data for Argentina are presented in line with IAS29, reflecting the implications of inflationary accounting, as the Argentinean economy is projected to be hyperinflationary for the first quarter of 2024. The company also stated that Argentina would be left out of all comparisons for consolidated data at constant exchange rates to maintain consistency.
Colombia’s revenues increased 1.5% to COP 3,793 billion, owing to an increase in fixed-line revenues.
Revenues from Mexico, Brazil, Austria and Other European regions witnessed year-over-year growth of 7.1%, 5.3%, 0.4%, and 0.9%, respectively. Revenues from the Caribbean, Ecuador and Central America declined 20.8%, 3.1% and 0.1%, respectively.
Other Quarterly Details
Total costs and expenses were Mex$122,714 million, down 2.8% from the year-ago quarter. Overall, EBITDA decreased 2.6% from the prior-year quarter to Mex$80,584 million. The EBITDA margin came in at 39.6%. The company’s operating profit decreased 7.6% to Mex$40,758 million.
Liquidity
As of Mar 31, 2024, America Movil had Mex$71,280 million in cash, marketable securities and other short-term investments with Mex$384,310 million of long-term debt.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -31.03% due to these changes.
VGM Scores
At this time, Amer Movil has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Amer Movil has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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