Mexico's 'super peso' could further squeeze company earnings in Q3 -analysts

MEXICO CITY, Aug 2 (Reuters) - Some Mexican companies saw revenues shrink in the second quarter as a stronger peso diluted foreign earnings, with the trend expected to continue into the next quarter, according to analysts who see the peso remaining strong.

The Mexican peso has strengthened more than 14% against the dollar so far this year, reaching its highest level since 2015 and making it one of the top-performing currencies globally, with analysts dubbing it the "super peso."

In the second quarter, telecommunications giant America Movil said revenues fell 5% after seeing fewer benefits from converting foreign currencies to pesos.

Restaurant operator Alsea said its second-quarter sales would have risen by nearly double had it not been for the sharp appreciation of the Mexican currency.

The peso's strength also raised labor costs for Mexican miner Grupo Mexico and hit tequila maker Jose Cuervo's revenues.

Analysts expect the trend will continue as the Mexican peso remains at strong levels against the U.S. dollar during the rest of the year, amid high interest rates.

"Going forward, if it (the exchange rate) remains below 17 pesos per dollar, I think we will see a third quarter with some weakness" in results, Gerardo Copca, a capital market analyst at MetAnalisis, said in an interview.

The peso could break a new barrier in the next weeks by trading at 16.50 against the U.S. dollar, according to analysts, part of an upward trend celebrated by the government but flagged by experts as a concern for remittances and exports.

"The strength of the Mexican peso is expected to continue during the second half of the year," said Alain Jaimes, a stock market analyst at Signum Research, adding that earnings of Mexican companies with operations outside the country could continue to suffer from the peso boost.

Bets for an even stronger peso on the Chicago Mercantile Exchange have remained strong since March. Last week, positions in favor of the currency's gaining climbed to 87,806 contracts, one of the highest amounts since 2020.

Similarly, a central bank survey showed on Tuesday that private analysts backed estimates of a stronger peso for 2023 by setting their forecast for the exchange rate at 17.90 per dollar from 18.33. (Reporting by Noe Torres; Writing by Valentine Hilaire; Editing by Leslie Adler)