America Movil (AMX) Stock Lower Today After AT&T Downplays Assets

NEW YORK (TheStreet) -- Shares of Carlos Slim's America Movil SAB de CV (AMX)  closed down 2.27% to $22.85 after AT&T (T) CEO Randall Stephenson said its $1.7 billion purchase of number three carrier lusacell would allow it to compete without Movil's assets, putting Slim's timetable for a deal in jeopardy, Reuters reports.

"We believe we have found a path that gets us a nice scalable growth platform without the America Movil assets," Stephenson said.

The longer the deal takes, the longer the America Movil is subject to tough antitrust regulations including zero interconnection rates and forced infrastructure sharing, which are already affecting its results, Reuters added.

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Separately, TheStreet Ratings team rates AMERICA MOVIL SA DE CV as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate AMERICA MOVIL SA DE CV (AMX) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, growth in earnings per share, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • The revenue growth significantly trails the industry average of 61.7%. Since the same quarter one year prior, revenues rose by 10.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AMERICA MOVIL SA DE CV reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AMERICA MOVIL SA DE CV reported lower earnings of $1.56 versus $1.85 in the prior year. This year, the market expects an improvement in earnings ($1.64 versus $1.56).
  • The gross profit margin for AMERICA MOVIL SA DE CV is rather high; currently it is at 54.45%. Regardless of AMX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AMX's net profit margin of 9.28% is significantly lower than the industry average.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Wireless Telecommunication Services industry and the overall market, AMERICA MOVIL SA DE CV's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: AMX Ratings Report

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