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Is a Beat in Store for America Movil (AMX) in Q3 Earnings?
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Mexican telecom behemoth, America Movil SAB (AMX - Free Report) is slated to report third-quarter 2017 results on Oct 24, after the closing bell.
Last quarter, America Movil delivered a negative earnings surprise of 28.13%. Moreover, the company’s earnings lagged the Zacks Consensus Estimate in three of the previous four quarters, with an average miss of 42.47%.
Let’s see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that America Movil is likely to beat estimates because it has the right combination of the two key elements.
Zacks ESP: America Movil has an Earnings ESP of +10.77%. This is because the Most Accurate estimate is at 36 cents while the Zacks Consensus Estimate is pegged at 33 cents. This is a meaningful indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: America Movil has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of America Movil’s favorable Zacks Rank and positive ESP makes us confident of a beat.
America Movil, S.A.B. de C.V. Price and EPS Surprise
America Movil’s efforts to systematically enriching its spectrum portfolio with the acquisition of wireless spectrums raise optimism. The acquisition of 60 MHz of wireless spectrum (airwave) in the 2.5 GHz band from Grupo MVS (in July 2017) will enhance the company’s high-speed data service. Moreover, the latest wireless roaming agreement with U.S. telecom giant AT&T Inc (T - Free Report) should help the company retain its position in the Mexican market. Meanwhile, regulatory approval from Argentina's National Communications Agency (Enacom) to enter into the pay-TV market of Argentina is a major positive for the company’s expansion operations. Notably, the company has already established both wireless and wireline operators in Argentina.
The decision to reduce its fixed-line-to-mobile call rates in a phased manner reflects its compliance with the norms. The company’s iPhone offer and launch of a Mexican language TV channel in the United States has allowed it to remain competitive. We believe that these positives have aided the company to outperform the industry in the past three months. The stock has returned 6.0% as against the industry’s decline of 1.0%.
When compared with the market at large, the stock’s performance looks outstanding, as the S&P 500 index is pegged at 3.6%, over the same time frame.
On the flip side, we remain concerned about America Movil’s aggressive promotional strategies (like discounts and subsidized offers), which are aimed to increase penetration in the smartphone market. These efforts may cause decline in margins with increased cost and expenses, thus affecting overall profitability of the company in the near term.
America Movil’s second-largest wireless market, Brazil, has become increasingly competitive. The company’s Brazilian operation (Claro) faces competitive threat from Vivo, owned by Telefonica Brazil SA (VIV - Free Report) . Meanwhile, AT&T’s entry into the Mexican telecom industry with the acquisition of Gurpo Iusacell and Nextel de Mexico pose severe competitive threat for the company. To this end, the company’s focus on shifting its base from Mexico to Brazil in the wake of declining quarterly revenues looks viable.
Accumulating debt and decreasing cash flows may pose problems for the company’s credit ratings going ahead. Objection from its rivals from taking part in the upcoming 2.5 GHz wireless spectrum auction in the country is another setback for the company.
Key Pick
Here is a company in the broader Computer and Technology sector — which houses America Movil — and has the right combination of elements to post an earnings beat this quarter.
The company is expected to release third-quarter 2017 earnings on Nov 6. The company’s earnings beat the Zacks Consensus Estimate in one of the previous four quarters.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Is a Beat in Store for America Movil (AMX) in Q3 Earnings?
Mexican telecom behemoth, America Movil SAB (AMX - Free Report) is slated to report third-quarter 2017 results on Oct 24, after the closing bell.
Last quarter, America Movil delivered a negative earnings surprise of 28.13%. Moreover, the company’s earnings lagged the Zacks Consensus Estimate in three of the previous four quarters, with an average miss of 42.47%.
Let’s see how things are shaping up for this announcement.
Why a Likely Positive Surprise?
Our proven model shows that America Movil is likely to beat estimates because it has the right combination of the two key elements.
Zacks ESP: America Movil has an Earnings ESP of +10.77%. This is because the Most Accurate estimate is at 36 cents while the Zacks Consensus Estimate is pegged at 33 cents. This is a meaningful indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: America Movil has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
The combination of America Movil’s favorable Zacks Rank and positive ESP makes us confident of a beat.
America Movil, S.A.B. de C.V. Price and EPS Surprise
America Movil, S.A.B. de C.V. Price and EPS Surprise | America Movil, S.A.B. de C.V. Quote
What's Driving the Better-than-Expected Results?
America Movil’s efforts to systematically enriching its spectrum portfolio with the acquisition of wireless spectrums raise optimism. The acquisition of 60 MHz of wireless spectrum (airwave) in the 2.5 GHz band from Grupo MVS (in July 2017) will enhance the company’s high-speed data service. Moreover, the latest wireless roaming agreement with U.S. telecom giant AT&T Inc (T - Free Report) should help the company retain its position in the Mexican market. Meanwhile, regulatory approval from Argentina's National Communications Agency (Enacom) to enter into the pay-TV market of Argentina is a major positive for the company’s expansion operations. Notably, the company has already established both wireless and wireline operators in Argentina.
The decision to reduce its fixed-line-to-mobile call rates in a phased manner reflects its compliance with the norms. The company’s iPhone offer and launch of a Mexican language TV channel in the United States has allowed it to remain competitive. We believe that these positives have aided the company to outperform the industry in the past three months. The stock has returned 6.0% as against the industry’s decline of 1.0%.
When compared with the market at large, the stock’s performance looks outstanding, as the S&P 500 index is pegged at 3.6%, over the same time frame.
On the flip side, we remain concerned about America Movil’s aggressive promotional strategies (like discounts and subsidized offers), which are aimed to increase penetration in the smartphone market. These efforts may cause decline in margins with increased cost and expenses, thus affecting overall profitability of the company in the near term.
America Movil’s second-largest wireless market, Brazil, has become increasingly competitive. The company’s Brazilian operation (Claro) faces competitive threat from Vivo, owned by Telefonica Brazil SA (VIV - Free Report) . Meanwhile, AT&T’s entry into the Mexican telecom industry with the acquisition of Gurpo Iusacell and Nextel de Mexico pose severe competitive threat for the company. To this end, the company’s focus on shifting its base from Mexico to Brazil in the wake of declining quarterly revenues looks viable.
Accumulating debt and decreasing cash flows may pose problems for the company’s credit ratings going ahead. Objection from its rivals from taking part in the upcoming 2.5 GHz wireless spectrum auction in the country is another setback for the company.
Key Pick
Here is a company in the broader Computer and Technology sector — which houses America Movil — and has the right combination of elements to post an earnings beat this quarter.
Windstream Holdings Inc has an Earnings ESP of +18.03% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is expected to release third-quarter 2017 earnings on Nov 6. The company’s earnings beat the Zacks Consensus Estimate in one of the previous four quarters.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>