February 12, 2013 / 10:51 PM / in 5 years

UPDATE 2-Mexico's America Movil profit drops, misses views

* Q4 profit 14.962 bln pesos vs 16.307 bln pesos yr ago

* Revenue down 1.1 percent at 198 bln pesos

MEXICO CITY, Feb 12 (Reuters) - America Movil, Latin America’s biggest phone company, on Tuesday reported an 8.2 percent drop in fourth-quarter profit, missing analysts’ expectations, as revenue fell due to currency weakness outside of Mexico.

The company, owned by the world’s richest man, Carlos Slim, said fourth-quarter profit slipped to 14.962 billion pesos ($1.16 billion) from 16.307 billion pesos a year ago.

That compares to an expected profit of 24.131 billion pesos, according to a Reuters survey of analysts.

Fourth-quarter revenue fell 1.1 percent to 198 billion pesos.

Profit was also hurt by a 346 million peso loss from investments in other companies, in part due to recent acquisitions in Europe. That loss compared to a 4.5 million peso quarterly loss in investments last year.

Still, the company said it added 5.6 million mobile subscribers in the fourth quarter to end the year with 19.8 million subscribers, up 18.4 percent from 2011.

At constant exchange rates, America Movil said its service revenue was up 5.2 percent year on year.

The company will hold a conference call to discuss its results with analysts on Wednesday.


Slim’s phone companies enjoy dominant positions in Mexico, where the cash they generate has helped fuel capital investments and a recent European acquisition spree.

The company started rolling out 4G services in Mexico at the end of last year, using long-term evolution (LTE) technology that boosts average speeds on wireless devices to 20 Mb from a current range of 3 Mb to 5 Mb.

Last year, America Movil also built up stakes in two European phone companies, accumulating a 26 percent holding in Telekom Austria and a nearly 28 percent stake in Dutch company KPN.

But unlike Slim’s Telcel and Telmex, which have 70 percent and 80 percent, respectively, of Mexico’s mobile and fixed-line markets, KPN and Telekom Austria face fierce competition in their local markets.

Telekom Austria shares rose 4.3 percent in the fourth quarter but are down 9 percent this year, and the company has warned its profit could fall further on tough competition.

KPN shares fell 37.5 percent in the fourth quarter and are down a further 15.7 percent this year.

Regulators in Mexico have been trying to increase supervision of Slim’s dominant America Movil and Telefonos de Mexico (Telmex) with limited success.

Mexico’s competition commission earlier this month announced it will fine America Movil’s Mexico-based home-phone service Telmex about $50 million for blocking a rival phone company from accessing its network.

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