Solid 4Q Seen For Mexico's America Movil On Subs Growth

MEXICO CITY -(Dow Jones)- Another strong quarter is predicted for Latin America's biggest wireless phone company, America Movil SA (AMX), when it reports its earnings this week.

In recent quarters, the Mexican company's acquisitions in South America and the high cost of growing them, have been among analysts' concerns.

But despite low margins in South America, America Movil beat estimates in the third quarter, increasing sales by half to 22.4 billion pesos ($1=MXN11.2630) and more than tripling net profit to MXN7.22 billion.

In the fourth quarter, America Movil will likely report sales of MXN35.5 billion, and EBITDA of MXN11.5 billion, according to the average of three analysts' estimates.

Morgan Stanley said in a report this week that it expects America Movil to have added 4.3 million subscribers in the fourth quarter to 58.3 million, a third more than a year ago.

Bear Stearns sees the company adding 4.9 million subscribers, with continued margin pressure in South America resulting from competition levels in Brazil and Argentina.

"The bottom line should be mainly boosted by the strength of Latin America currencies in the fourth quarter," the investment bank said.

BBVA Securities said in a report this week that it also expects strong currencies to contribute to a solid overall performance by Latin American telecommunications companies, with America Movil and Telesp Celular Participcaoes SA (TCP), benefiting the most from Brazilian growth.

Brazilian telecom regulator Anatel reported last week that the number of wireless subscribers grew by 19.2 million in 2004, including 4.4 million in the fourth quarter, to 65.6 million.

"Needless to say, wireless subscriber growth will again be a highlight, and we believe that the two benchmark plays, America Movil and TCP, will not suffer from significant margin loss on the back of the typically feverish 4Q04 rush," BBVA said.

Mexico's telecommunications regulator Cofetel has yet to complete its fourth-quarter report on mobile use, although preliminary indications are than Mexico ended 2004 with more than 37 million cell phone subscribers, up from 35.7 million at the end of the third quarter.

America Movil's Mexican unit Telcel probably added 1.2 million subscribers in the fourth quarter to 28 million.

America Movil plans to release its fourth-quarter results Thursday after 4 p.m. EST (2100 GMT).

-By Anthony Harrup, Dow Jones Newswires; (5255) 5080-3450, anthony.harrup@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 26th January 2005