Brazil Company Sales Miss Analysts’ Estimates Most Since ‘09

Brazilian companies missed analysts’ revenue estimates by the most since 2009 in the second quarter as the slowdown in Latin America’s biggest economy curbed domestic demand.

Of 58 companies listed on the benchmark Bovespa index that reported, 32 missed sales forecasts from Redecard SA (RDCD3), Brazil’s second-biggest card-payment processor to PDG Realty SA Empreendimentos & Participacoes, the nation’s third-biggest homebuilder, data compiled by Bloomberg show. The 55 percent ratio after the Bovespa companies’ final earnings reports were released yesterday is the highest since the first quarter of 2009, according to the data.

Sales trailed estimates even after policy makers cut interest rates to a record low, reduced taxes on consumer and industrial goods and boosted state-backed development loans to help shore up growth that eased to 0.75 percent in the first three months of 2012, the slowest pace among the region’s major economies. President Dilma Rousseff’s administration unveiled plans yesterday to seek as much as 133 billion reais ($66 billion) in investments over 30 years through the sale of licenses to build and operate roads and railways.

“We haven’t seen many things that indicate that there’ll be a quick turnaround,” Ed Kuczma, who helps manage $31 billion at Van Eck Associates Corp., said by telephone from New York. “But there’s a lot of stimulus in place, let’s see how that goes.”

Growth Outlook

Redecard, based in Barueri, Brazil, reported sales of 771.2 million reais in the second quarter, below the average estimate of 966.5 million reais in a Bloomberg survey of 14 analysts. Rio de Janeiro-based PDG’s sales missed the average forecast by 29 percent, according to data compiled by Bloomberg.

Gross domestic product in Brazil will expand 1.81 percent this year, the slowest pace since 2009, down from 2.7 percent in 2011, a central bank survey of 100 economists showed on Aug. 13. The same survey showed a median growth forecast of 3.3 percent on Jan. 9.

Europe’s debt crisis helps to explain the slowdown in Brazil, as a cooling global economy affected the country’s exports, said Alvaro Bandeira, a partner and chief economist at Orama Asset Management

Corporate earnings in Brazil may pick up in coming months should policy makers around the globe take further steps to boost the recovery, Bandeira said.

“The second half of 2012, especially the last quarter, should be better for the Brazilian companies on the Bovespa,” Bandeira said by phone from Sao Paulo. “Things should improve if European and American leaders take more measures to revert the crisis.”

Second-Quarter Earnings

Thirty-six companies out of 58 on the Bovespa index reported earnings that missed forecasts in the second quarter, including Petroleo Brasileiro SA (PETR4), Brazil’s state-controlled oil company, and Gol Linhas Aereas Inteligentes SA, Brazil’s second- biggest airline by market value. That was the highest ratio of results that trailed estimates since the first quarter of 2010, according to data compiled by Bloomberg.

The Bovespa has climbed 4.7 percent this year, which compares with a drop of 4 percent for the Shanghai Composite Index, a 3.7 advance for Russia’s Micex and a 14 percent jump for India’s Sensex.

While Brazil’s slowdown affects companies that sell in the local market, a drop in commodities prices also curbed producers’ revenue, Kuczma said. Rio de Janeiro-based Vale SA (VALE3), the world’s largest iron-ore producer, reported sales of 23.9 billion reais in the second quarter, 5.3 percent below the average estimate in a Bloomberg survey.

To contact the reporters on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net; Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

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

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