Shares in Mexico's America Movil tumble after Q3 earnings drop, executives look ahead (updated)
18/10/2023 17:38
(Recasts with share price, adds context, adds detail on
TracFone sale)
MEXICO CITY, Oct 18 (Reuters) -
Shares of Mexican telecommunications firm America Movil
tumbled mid-morning Wednesday after reporting earnings below
expectations, while company executives looked ahead in a call
with investors to detail plans to boost a Chilean joint venture.
America Movil's third-quarter net profit, posted on Tuesday,
plummeted nearly 90% amid higher financing costs and a stronger
peso.
Shares in the firm were down more than 4.5% by
mid-morning, while Mexico's main stock index was down more than
1%.
Meanwhile, America Movil is very focused on making its
Chilean joint venture with Liberty Latin America a much stronger
company in the future, its CEO Daniel Hajj said on Wednesday.
The partners of the joint venture agreed on a business plan
and are executing it fine, America Movil Chief Financial Officer
Carlos Garcia said in a third-quarter earnings call with
analysts.
The Chilean operation combines America Movil's Claro Chile
and Liberty Latin America's VTR and is aimed at expanding fixed
fiber availability and 5G mobile delivery, the two said in 2021.
Garcia said America Movil was happy with current
management of the joint venture and has not envisioned any
change in stake holdings, when asked about its cash deployment
compared to Liberty Latin America's so far.
Executives added that America Movil had raked in a 3.3
billion peso ($180.71 million) earn-out from a 2021 sale of
pre-paid mobile phone provider
TracFone to Verizon
, without specifying a time frame.
Verizon was expected to pay up to an additional $650
million in cash consideration within two years of the sale if
TracFone continued to achieve certain operating metrics, America
Movil said in 2021.
($1 = 18.2615 Mexican pesos)
(Reporting by Mexico City newsroom)
((Kylie.Madry@thomsonreuters.com;))