MEXICO CITY (AP) -- Shares of America Movil, Latin America's largest mobile phone service provider, plunged Friday following a report that the company's first-quarter profit fell 5.5 percent.
CEO Daniel Hajj said in a conference call Friday that third-generation services such as wireless broadband in new markets would boost sales by year's end and help the company recover.
After the company, controlled by Mexican billionaire Carlos Slim, reported Thursday that its first-quarter profit fell to $1.3 billion, its stock fell 12 percent early Friday and dragged down Mexico's stock market index.
Hajj attributed the decline in earnings to spending on introducing 3G wireless networks in Mexico, Colombia, Peru, El Salvador, Honduras and Nicaragua. The company now offers 3G networks in 14 countries.
He also said higher financing costs resulting from an accounting change cut into profits.
"We feel that today America Movil is in a very good position," Hajj said. "We're investing for the long term. We're investing for next year, and we cannot decide (based) on one quarter or two quarters, the way America Movil is operating. I think for the long term we're doing the right things for the company."
The company said it added 5.7 million wireless subscribers in the first quarter, bringing its total to 159.2 million. The biggest growth occurred in the company's home market of Mexico, with 1.5 million new customers; in Brazil, which added 953,000; and Argentina, Peru and Colombia, which each gained more than a half-million new wireless accounts.
Earnings before interest, taxes, depreciation and amortization, or Ebitda, increased 17.8 percent for the quarter, to $3.2 billion. First-quarter revenue rose 20.6 percent to $7.8 billion.
Hajj said America Movil expects to continue to return excess cash to shareholders in 2008 through dividends and buybacks.
He added that the company has no present plans to expand its operations in the United States, where it has 9.9 million prepaid subscribers.