Will Forex Headwinds Hit America Movil's (AMX) Q4 Earnings?

Mexican telecom behemoth, America Movil S.A.B. de C.V. AMX, is slated to release fourth-quarter 2015 results on Feb 9, after market close.

Last quarter, the company reported loss in contrast to the Zacks Consensus Estimate of earnings, leading to a negative surprise of 120.83%. Moreover, the company posted negative surprises in all of the prior four quarters, with an average miss of 72.54%. Let's see how things are shaping up ahead of this announcement.

Factors Likely to Influence this Quarter

In the past few quarters, the company's results have been hurt by foreign currency impact. Thus, continuous adverse foreign exchange rate movement in several Latin American countries, especially the depreciation of the Brazilian real against the U.S. dollar, might affect earnings in the to-be-reported quarter.
    
Moreover, regulatory issues in Mexico, the company's aggressive promotional strategies and rising competition in the Mexican telecom industry are certain factors that may weigh upon the quarter's results.

Meanwhile, grant of institutional waiver by Federal Telecommunications Institute IFT for the recently spun off towers, Telesites, to begin operations is a positive. Notably, the towers were listed on the Mexican stock exchange, last December. Also, IFT's approval regarding the prices the company can charge as interconnection fees, should somewhat offset the negatives.
              
Earnings Whispers

Our proven model does not conclusively show that America Movil is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.

Zacks ESP: America Movil has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are poised at 54 cents.

Zacks Rank: America Movil has a Zacks Rank #5 (Strong Sell). Note that, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
    
Stocks to Consider

Here are some companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:

Windstream Holdings, Inc. WIN has an earnings ESP of +16.33% and a Zacks Rank #2.

InterDigital, Inc. IDCC has an earnings ESP of +33.33% and a Zacks Rank #3.

Infinera Corporation INFN has an earnings ESP of +7.14% and a Zacks Rank #3.

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