America Movil stock balances mobile growth against forecast miss

America Movil reported stronger third-quarter operating performance on October 20, but the Mexican telecommunications group missed analyst forecasts, according to a Reuters report carried by Fidelity. Revenue increased 7.6 percent year over year to 250.63 billion Mexican pesos, while net profit rose 7 percent to 24.28 billion pesos.

Mobile service revenue climbed 6.3 percent from the year-earlier quarter, matching the pace recorded in the second quarter. America Movil added 3.1 million net postpaid subscribers, with Brazil providing the largest contribution. The group also recorded five million net prepaid disconnections, mainly in Mexico and Colombia, as customer-base cleanups weighed on the reported subscriber total.

Mobile Growth Supports Results

The operating mix remained tilted toward higher-value customer relationships. Postpaid demand supported service revenue, while the prepaid reductions showed that subscriber volume alone does not capture the quality of the customer base. For investors, the combination points to continued commercial momentum but also leaves the earnings miss as a counterweight to the stronger operating figures.

Analysts polled by LSEG had expected dollar-denominated net profit of 1.51 billion dollars and revenue of 14.05 billion dollars. America Movil reported 1.34 billion dollars of net profit and 13.86 billion dollars of revenue at the exchange rate cited in the Reuters report. The shortfall keeps attention on the conversion of service growth into earnings as the company manages currency effects and customer-acquisition costs.

Desktop Broadens Brazil Strategy

America Movil completed the acquisition of Brazilian broadband provider Desktop in early October. The transaction gives the group another fixed-line expansion lever in Brazil and adds integration execution to the factors investors will monitor alongside mobile growth. Management's immediate task is to combine the broadband assets with Claro's existing mobile and fiber offerings without weakening operating momentum.

America Movil stock traded at 23.00 euros on Lang & Schwarz at 16:35 CET on Tuesday, November 10.

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