October 23, 2014 / 10:29 PM / 3 years ago

America Movil third-quarter profit drops 38 percent, tax burden up

MEXICO CITY (Reuters) - Mexico’s America Movil on Thursday said its third-quarter net profit fell 38 percent compared to a year earlier as taxes rose and the cost of sales jumped.

The logo of America Movil is seen on the wall of the reception area in the company's corporate offices in Mexico City February 13, 2013. REUTERS/Edgard Garrido

The company, which is controlled by the family of billionaire Carlos Slim, said profit in the July-September period fell to 10.12 billion pesos ($754 million) from 16.38 billion pesos a year earlier.

Analysts had expected the company to report a net profit of 16.47 billion pesos, according to a Reuters poll.

America Movil’s tax burden rose by 4.43 billion pesos versus the same quarter last year, while the cost of sales rose 16.157 billion pesos.

Revenue rose 14 percent to 220.884 billion pesos, principally due to the consolidation of Telekom Austria, of which it now owns almost 60 percent, into the results for the first time.

America Movil is in the midst of a regulatory crackdown in its home market Mexico. In response, in July the company said it would sell a chunk of assets to reach a market share below the 50 percent threshold defined by the regulator.

America Movil’s share price has risen by around 20 percent since the announcement, compared to a less than 1 percent rise in Mexico’s IPC index. That increase temporarily made Carlos Slim the world’s richest man again, according to Forbes.

Shares in America Movil closed down 0.06 percent at 16.12 pesos on Thursday before it published its results.

Reporting by Christine Murray; Editing by Simon Gardner and David Gregorio

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