Cyrela’s Quarterly Profit Beats Estimates on Cash Generation

Cyrela Brazil Realty (CYRE3) SA Empreendimentos & Participacoes, Brazil’s second-biggest real- estate company by revenue, reported fourth-quarter net income that beat analysts’ estimates as a result of strong cash generation.

Net income more than doubled to 181 million reais ($100 million) from 83 million reais a year earlier, the Sao Paulo- based company said in a regulatory filing late yesterday. That exceeded the average estimate for net income of 175 million reais among nine analysts surveyed by Bloomberg.

Cyrela’s shares rose 1.6 percent to 18.09 at 10:56 a.m. in Sao Paulo, while the benchmark Bovespa stock index gained 0.3 percent.

Cash generation in the quarter was 130 million reais, compared with negative cash generation of 492 million reais in the same period of 2010.

“Overall, the lack of detailed disclosure regarding the good cash generation in the quarter ended up preventing Cyrela from consolidating itself as the first player able to generate cash on a sustainable basis,” Credit Suisse AG (CSGN) analysts Guilherme Rocha, Daniel Gaparete and Vanessa Quiroga wrote in a report today. They have a neutral rating on the stock.

Cyrela’s net sales increased 43 percent to 1.98 billion reais in the fourth quarter. The company aims to achieve sales of 6.9 billion reais to 8 billion reais in 2012, according to the filing.

To contact the reporters on this story: Karen Eeuwens in London at; Felipe Frisch in Sao Paulo at

To contact the editor responsible for this story: Helder Marinho at

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