Despite a challenging market environment, America Movil, S.A.B. de C.V. (AMX) showcased a remarkable surge in net income, reporting 33 cents for the fourth quarter of 2023. This figure marked a substantial increase from the 22 cents reported in the prior-year quarter.
Notably, the company’s total quarterly revenues witnessed a 7.1% decline, amounting to Mex$200,713 million, primarily attributable to lackluster performance in the Service and Equipment business segments. Unfavorable foreign currency movement and rising interest rates exacerbated the situation.
America Movil, S.A.B. de C.V. Unsponsored ADR Price, Consensus and EPS Surprise
The company’s comprehensive financing cost surged by 88% to Mex$15,609 million from the year-ago quarter’s comprehensive financing costs of Mex$8,301 million.
America Movil Witnessed Varied Regional Performance
America Movil experienced a mixed bag of regional performance. While it observed year-over-year growth in revenues from Mexico, Brazil, Central America, Austria, and Other European regions, it faced a decline in revenues from the Caribbean and Ecuador. Notably, Peru, Argentina, and Colombia witnessed distinctive revenue trends.
Peru
Peru experienced a year-over-year revenue decline of 9.2% to Mex$16204 million Soles, primarily driven by a decrease in equipment revenues.
Argentina
Argentina’s revenues stood at ARS 210,592 million, reflecting a 10.7% decline from the year-ago quarter. This downturn was primarily caused by decreasing service, equipment lines, and wireless revenues. Importantly, the reported data for Argentina is presented in line with IAS29 due to inflationary accounting implications.
Colombia
Colombia’s revenues witnessed a 3.8% increase to COP 3,885 billion, with the surge primarily attributable to an upturn in fixed-line revenues.
Operating Margin and Liquidity
America Movil’s operating profit decreased by 6.4% to Mex$41,808 million, and the EBITDA margin stood at 39%, while total costs and expenses decreased by 6.7% from the year-ago quarter to Mex$122,446 million. As of December 31, 2023, the company boasted Mex$100,353 million in cash, marketable securities, and other short-term investments with Mex$339,713 million of long-term debt.
Outlook and Recommendations
Despite the revenue decline, America Movil holds a promising outlook, reflected in its current Zacks Rank of #2 (Buy). The broader technology space also presents potential investment opportunities, with companies like Itron, Inc., Woodward, Inc., and Watts Water Technologies, Inc., showing favorable stock performance trends.
Notably, Itron, Inc., Woodward, Inc., and Watts Water Technologies, Inc. sport impressive Zacks Rank #1 and #2 ratings, with encouraging earnings prospects.
These companies bear resemblance to the recent success stories like Boston Beer Company and NVIDIA, indicating a potential wealth-creation opportunity in the current market environment.
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