Mexican telecommunications company América Móvil (NYSE: AMX) reported disappointing second-quarter 2012 earnings Friday amid increasing competition and an unfavorable foreign exchange rate for the peso.
The Mexico City-based telco reported Q2 net income of MXN 13.3 billion (USD 980.6 million), down 45.5 percent year-over-year.
In an earnings call with analysts, América Móvil's CEO Daniel Hajj said the company's earnings were hurt partly by the increasing use of smartphones and its related costs for subsidizing postpaid customers.
A venture of billionaire telecom magnate Carlos Slim, América Móvil reported total Q2 revenue of MXN 191.7 billion (USD 14.2 billion), up 9 percent year-over-year.
Analysts surveyed by Reuters were expecting, on average, a net profit of MXN 24.6 billion (USD 1.85 million) for the three-month period ending June 30.
By segment, América Móvil's fixed-voice revenues fell 7.7 percent amid lower long-distance calling sales. Pay-TV revenue increased 23 percent over the same period a year ago. Satellite- and cable-TV services in Central and South America increased 31 percent.
For Q2, América Móvil said it added 1.7 million fixed-line accesses, bringing the customer segment to 61.2 million. At the end of March, the company had 30 million fixed lines, 16 million Internet subscribers and 14 million TV subscribers.
Amid a weaker Mexican peso, América Móvil reported a Q2 foreign-exchange loss of MXN 16.1 billion (USD 1.21 million), compared to a year earlier, when the company posted a currency gain of MXN 2.38 billion.
América Móvil reported a Q2 earnings before interest, tax, depreciation and amortization (EBITDA) rose 3.1 percent, to MXN 65.5 billion (USD 4.95 million).
The company's debt as of June 30, totaled MXN 361 billion (USD 27.28 million), an increase of MXN 29.7 billion (USD 2.24 million) this year, as a result of the new investments in the Dutch telecom KPN (Amsterdam: KPN) and Telekom Austria (OTC: TKAGY).
Special Report: Wireline earnings in the second quarter of 2012
América Móvil's TracFone leans on Simple Mobile deal for Q2 growth
Analysts: América Móvil may push KPN to invest more in networks
América Móvil secures 27.7% stake in KPN, plans long-term partnership