Randon Plunges Most in a Month as Profit Misses Estimates

Randon SA Implementos e Participacoes plunged the most in a month after the Brazilian auto-parts maker’s third-quarter profit fell more than analysts estimated.

Randon slid 5 percent to 9.83 reais at the close in Sao Paulo, the most since Oct. 4. That extends the decline this year to 20 percent, compared with 17 percent for the BM&FBovespa Small Cap (SMLLBV) index, of which it is a member. That measure lost 1.9 percent today.

Net income slumped 5.1 percent from a year earlier to 62.9 million reais ($35.9 million), according to a statement yesterday after the market closed. That compares to an average forecast of 73.1 million reais in a Bloomberg survey of four analysts. Sales expenses jumped 29 percent, outpacing growth of 8.8 percent in net revenue. The result was “disappointing,” according to Itau Unibanco Holding SA.

“In the event that the higher-than-expected selling expenses are recurrent, there is room for a downward revision in our forecasts for Randon,” Renata Faber, an analyst at Itau in Sao Paulo, wrote in a note to clients yesterday. She has an “outperform” recommendation on Randon and projects that the shares will rise to 15 reais by the end of next year.

Rival Iochpe-Maxion SA (MYPK3) dropped 1.9 percent to 22.50 reais while Autometal SA, the Brazilian unit of Spanish auto-parts maker Cie Automotive SA, was unchanged 12.40 reais after losing as much as 2.6 percent earlier.

To contact the reporter on this story: Alexander Cuadros in Sao Paulo at acuadros@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos in New York at papadopoulos@bloomberg.net

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