By Elinor Comlay
MEXICO CITY, July 25 Latin America's biggest
phone company America Movil on Thursday
reported better-than-expected second-quarter core profit and
revenue, as more customers made mobile calls in Mexico and South
The company, controlled by billionaire businessman Carlos
Slim and his family, had been struggling in recent quarters
against tougher competition and slowing economic growth in some
markets such as Brazil.
But customers in Brazil, Chile and Mexico helped drive a
pickup in voice traffic in the quarter after two quarters of
weakness, the company said.
Revenue rose 1.6 percent to 194.8 billion pesos in the
The improved revenue may go some way to assuage analysts'
concerns over growth potential in the region, which last year
prompted America Movil to make its first investments in Europe.
Those investments have come under scrutiny as America Movil
has accumulated deep paper losses. However, a deal announced by
Telefonica this week to buy the German unit of Dutch
telecoms group KPN - in which Slim has an almost 30
percent stake - could help pare the losses.
Shares of Slim's flagship company have also taken a pounding
in recent months on concerns he could be forced to sell assets
under a wide-reaching overhaul of the telecom sector in Mexico.
The stock is down 11 percent year-to-date, underperforming
Mexico's benchmark stock index, which is down 7
Several analysts contacted by Reuters said it was too soon
to comment on the earnings statement. Company officials are due
to hold a conference call with analysts on Friday.
Core profit, or earnings before interest, taxes,
depreciation and amortization (EBITDA), came in at 65 billion
pesos, slightly below the year-earlier quarter but ahead of
analysts' expectations of 61.88 billion pesos, according to a
Reuters survey of six analysts.
Still, as the Mexican peso weakened against the U.S. dollar
in the second quarter, the company paid more interest on its
America Movil reported a profit of 14.193 billion pesos
(US$1.09 billion), up 8 percent from 13.157 billion pesos a year
Net profit missed expectations, which was hurt by currency
movements in the quarter as Mexico's peso gained against some
regional currencies but it weakened against the U.S. dollar.
The shares closed down 0.45 percent at 13.21 pesos before
the results were announced.