América Móvil, S.A.B. de C.V. (AMX) Balance Sheet

The sequential decline in net PPE, despite consistent CAPEX averaging over $30B per quarter, indicates that depreciation and FX translation are outpacing gross investment. This suggests the rate base is shrinking in real terms, which may pressure future regulated returns. Investors should monitor whether the 5G and fiber CAPEX cycle can reverse this trend, as the current trajectory implies a decelerating asset base.

The decline in net PPE, despite sustained capital spending, suggests that depreciation and currency devaluation are eroding the regulated asset base faster than new investments are added. This may indicate that the company is not fully recovering its capital costs through regulated tariffs, potentially compressing future returns. The composition of PPE, with a shift toward fiber and 5G, could improve efficiency, but the near-term recovery lag warrants attention.

The sharp deleveraging in 2026Q2, with total debt falling from $918.8B to $691.5B, appears to be a deliberate effort to strengthen the balance sheet, possibly using cash reserves and operating cash flow. However, the debt-to-equity ratio of 1.58 still exceeds the 1.35-2.07 range of US peers like AT&T and Verizon, indicating limited headroom for additional borrowing. This suggests the company may prioritize debt reduction over buybacks or M&A in the near term.

The equity expansion, despite a challenging FX environment, indicates that retained earnings are accumulating, likely aided by the reduction in debt and lower interest costs. The improvement in ROE, though still modest, suggests that the company is generating returns above its cost of equity, which may support dividend sustainability. However, the equity-to-assets ratio remains stable at 0.24, implying that the balance sheet is still heavily reliant on debt financing.

The volatility in cash balances, with a $64.7B swing over three quarters, suggests that the company is actively managing its liquidity to fund CAPEX and debt repayments, but the current ratio consistently below 1.0 indicates potential strain on short-term obligations. This may imply reliance on revolving credit facilities or commercial paper to bridge gaps, which could be costly in a rising rate environment. Investors should monitor the availability and cost of these facilities, as the thin liquidity buffer offers limited cushion against unexpected cash outflows.

The absence of forward guidance, combined with decelerating revenue growth, suggests that management may be cautious about the near-term outlook, possibly due to regulatory and FX uncertainties. The high CAPEX intensity, consuming over 50% of operating cash flow, indicates that the company is betting on future growth, but the lack of clarity on recovery mechanisms, such as rate cases or trackers, adds risk. Investors should watch for any regulatory decisions in Mexico or Brazil that could affect the pace of cost recovery.