Telmex boasts solid Q1

Mexican telecommunications spitfire Teléfonos de México SA de CV (Telmex) posted strong results for the first quarter Tuesday, reporting a 6.5-percent increase in revenue growth, driven by increased lines and traffic.

Revenue for the first quarter totalled 26 billion pesos (US$2.8 billion) while earnings per share notched up from 0.42 pesos in the first quarter of 2000 to 0.43 pesos this quarter, beating a First Call/Thomson Financial survey of analysts who predicted 0.41 pesos in earnings per share for the quarter ending March 31.

Although profits weren't listed in Telmex's earnings report released after markets closed Tuesday, Mexican daily Reforma reported Wednesday that the company had a 13.6-percent decrease in net profits for the first quarter of the year over the same period last year, due in part to the fact that results for its Telcel cellular division were for the first time reported separately.

The darling of Latin American telecom showed a 5.3-percent increase in earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter over last year, however. EBITDA is seen as a strong indicator of profitability.

The company benefitted from a steady increase in telephone lines and traffic, reporting a 10.5-percent increase in lines during the first quarter. Additionally, the telecom juggernaut reported a 44.8-percent increase in Internet access accounts and an 88.8-percent jump in line equivalents for data business, making data connectivity Telmex's largest growth area.

Domestic long-distance traffic increased 15.9 percent during the period, while international long-distance dove 19.9 percent, the company reported.

Telmex's revenue mix for the first quarter showed the company more heavily perched upon domestic services, where the former telephone monopoly still holds a grip on the market, with 47.5 percent of its revenue coming from local service and 26.1 percent from domestic long distance. International long distance accounted for 8.3 percent of the company's revenue, whereas 14.3 percent came from interconnection fees and 3.7 percent came from other sources.

The company's Nasdaq-traded ADR (TMX) was trading slightly up Wednesday morning, to US$34.35 a share.

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