What happened
Shares of Liberty Latin America (LILA 0.14%) are falling today, down by 10% as of 3:30 p.m. ET, compared to a 1.7% slump in the S&P 500. That decline added to a difficult period for the communications and entertainment specialist, whose stock is down 35% so far in 2022.
The move lower came after the company announced its Q3 results.
So what
Liberty Latin America said in a pre-market press release that sales were flat in the selling period that ended in late September after adjusting for currency exchange rate shifts. The company saw solid growth in its broadband and mobile postpaid subscription services.
Those gains were offset by temporary challenges, though, such as disruption from Hurricane Fiona and the transfer of its business in Chile. "We continued to drive top-line growth, excluding our Chilean operation," CEO Balan Nair said in a press release.
Still, investors seemed disappointed that sales trends slowed further from the 1% increase that the company posted in the prior quarter.
Now what
Management is optimistic about its growth and cost-cutting projects, which together should help the company generate lots of cash over the next few years. Liberty is shifting more of its business toward high-margin postpaid mobile subscriptions, for example, which rose by 73,000 in Q3.
Continued success in these areas, and in management's cost cuts, promise to lay the groundwork for solid earnings growth. However, the stock might remain under pressure in the short term as investors try to gauge whether sales trends will remain flat, decline, or begin accelerating again over the next few quarters.
That volatility is being amplified right now by worries that economic growth rates will slow further around the company's international markets in Latin America and the Caribbean.
