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America Movil (AMX) Q4 Earnings & Revenues Increase Y/Y

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America Movil, S.A.B. de C.V. (AMX - Free Report) reported healthy fourth-quarter 2021 results, wherein both earnings and revenues increased on a year-over-year basis.

Amid worldwide supply chain disruptions, the market has been facing volatility in interest rates with a rise in inflation. Despite such volatility, equity markets continued to progress, with the S&P 500 recording a 10.7% increase in the quarter. The Mexican peso, Colombian peso and Chilean peso experienced bouts of volatility in the second half of November, with the latter two depreciating further.

Bottom Line

Net income in the December quarter was Mex$135,589 million or Mex$2.09 per share compared with Mex$37,312 million or Mex$0.56 per share in the year-ago quarter. The year-over-year improvement was mainly driven by top-line expansion and comprehensive financing cost in the reported quarter. In 2021, net income came in at Mex$196,025 million compared with Mex$46,853 million in 2020.

The company had a comprehensive financing cost of MxP19.7 billion against the year-earlier quarter’s comprehensive financing income of MxP15.4 billion.

Quarterly net income per ADR came in at $2.01 compared with 54 cents in the prior-year quarter. The Zacks Consensus Estimate for the quarter’s earnings was 43 cents.

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

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

Revenues

Backed by a strong demand for broadband services, total quarterly revenues increased 7.7% to MxP227,318 million ($10,955.8 million). Higher service revenues acted as a major tailwind. The Zacks Consensus Estimate for revenues was $12,968 million.

In 2021, total revenues came in at MxP855,535 million compared with MxP839,707 million in 2020.

Service revenues were MxP179,682 million ($8,660 million), up 5.4% year over year. Equipment revenues totaled MxP38,485 million ($1,854.8 million), down 0.5%.

America Movil gained 4.8 million wireless subscribers in the fourth quarter, including 2.2 million postpaid subscribers. Brazil, Colombia and Austria were the primary contributors for higher postpaid subscribers. In the case of prepaid, Mexico, Colombia and Argentina played a vital role. As of Dec 31, the company had 287 million wireless subscribers.

On the fixed-line platform, the company had net disconnections of 139,000 revenue-generating units (RGUs). It gained 72,000 new broadband clients on the fixed-line segment, ending the quarter with 367 million access lines, including 287 million wireless subscribers and 80.5 million fixed-line RGUs. America Movil completed the sale of TracFone Wireless to Verizon Communications in the reported quarter. It also increased its buyback fund by an additional amount of MxP$26 billion pesos for the period April 2021 to April 2022.

The telco operates in multiple regions, namely Mexico, Argentina, Brazil, Colombia, Chile, Ecuador, Peru, Central America, Caribbean, Austria and the United States. Out of these, Peru witnessed year-over-year revenue growth of 13.1% to 1,669 million soles ($411.4 million). The robust performance was driven by higher service and equipment revenues.

Argentina’s revenues fell 1.9% to ARS 44,677 million ($444.94 million) from ARS 45,561 million in the year-ago quarter owing to declining equipment and wireless revenues.

Other Quarterly Details

Total expenses were MxP137,508 million, up 2.5% from MxP134,107 million recorded in the year-ago quarter. Overall, EBITDA rose 16.6% from the prior-year quarter to MxP89,810 million. The EBITDA margin came in at 39.5% compared with 36.5% in the year-earlier quarter on the back of foreign exchange gains, the sale of towers by Telmex in the quarter and a positive impact associated with the release of certain collection reserves in 2020.

Liquidity

As of Dec 31, 2021, America Movil had MxP156,383 million ($7,640.4 million) in cash, marketable securities and other short-term investments with MxP418,807 million ($20,461.7 million) of long-term debt.

Zacks Rank & Stocks to Consider

America Movil currently has a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the broader industry are Progress Software Corporation (PRGS - Free Report) , Citrix Systems, Inc. (CTXS - Free Report) and Intuit Inc. (INTU - Free Report) . While Progress Software sports a Zacks Rank #1 (Strong Buy), Citrix Systems and Intuit carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Progress Software’s current-year earnings has been revised 1.5% upward over the past 60 days.

Progress Software delivered a trailing four-quarter earnings surprise of 26.8%, on average. It has returned 5% in the past year. PRGS has a long-term earnings growth expectation of 2%.

The Zacks Consensus Estimate for Citrix Systems’ next-year earnings has been revised 1.3% upward over the past 60 days.

Citrix Systems delivered a trailing four-quarter earnings surprise of 19.8%, on average. The stock has gained 14.8% in the past three months.

The Zacks Consensus Estimate for Intuit’s current-year earnings has been revised 0.2% upward over the past 60 days.

Intuit delivered a trailing four-quarter earnings surprise of 20.9%, on average. The stock has rallied 39.5% in the past year. INTU has a long-term earnings growth expectation of 15.7%.

Conversion rate used:

MxP1 = $0.048196 (period average from Oct 1, 2021 to Dec 31, 2021)

MxP1 = $0.048857 (as of Dec 31, 2021)

1 Peruvian Sol = $0.246495 (period average from Oct 1, 2021 to Dec 31, 2021)

1 Argentine Peso = $0.009959 (period average from Oct 1, 2021 to Dec 31, 2021)