America Movil's first-quarter wireline revenues rise 9.2%, but profits drop 42%

While América Móvil says its first-quarter wireline revenues rose 9.2 percent in the first quarter, it wasn't enough to offset the company's 42 percent profit decline.

Despite gains in wireline revenue generating units (RGUs), the company reported that overall quarterly profits dropped 42.1 percent to slump in net profits to $533.8 million. América Móvil  attributed the profit slide to a second consecutive quarter of foreign exchange losses--mainly due to the depreciation of the Brazilian real (BRL) versus the U.S. dollar.

Interestingly, the profit drop comes as the service provider reported a 13 percent increase in first-quarter revenue, roughly in line with expectations, a factor it attributes to the inclusion of Telekom Austria's results. According to a Reuters poll, analysts had forecast higher net profit of 13.46 billion pesos.

As of the end of March, the service provider said it had 78.3 million wireline RGUs following the disconnection of 674,000 broadband connections in Mexico due to a change in its churn policy.

The telco's wireline RGU base rose 4.6 percent, with PayTV units expanding 7 percent, broadband connections rising 5 percent and fixed lines growing 3 percent.

Similar to earlier quarters, América Móvil said that nearly half of the RGUs--46 percent--were in Brazil. Overall Brazil wireline platform revenues, which account for two-thirds of the country's total revenues, rose 7.4 percent from the year-earlier quarter.

Meanwhile, Mexico accounted for 28 percent, Colombia 7 percent, and both Central America and Europe (Telekom Austria) slightly less than 6 percent of the RGUs.

For more:
- see the earnings release (.pdf)
- Reuters has this article

Special Report:  Wireline telecom earnings in the first quarter of 2015

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