Totvs Tumbles in Sao Paulo as Quarterly Earnings Trail Estimates

Totvs SA (TOTS3) fell the most in eight months in Sao Paulo after the business-management software developer’s fourth-quarter earnings trailed some analysts’ estimates.

Shares dropped 4.4 percent to 42.12 reais at 12:42 p.m. local time after earlier tumbling as much as 6.3 percent in the steepest intraday decline since May 15. It was the worst performance on the MSCI Brazil Index, which slid 1.4 percent.

Fourth-quarter net income was 66.9 million reais ($33.7 million), Sao Paulo-based Totvs said in a statement after the close of trading yesterday. That was below Bradesco BBI’s estimate of 69.9 million reais and Itau BBA’s forecast of 69.7 million reais. The margin on earnings before interest, taxes, depreciation and amortization was 25.9 percent, down 10 basis points from a year earlier. Revenue rose 7.9 percent to 361.5 million reais.

The quarterly results “were weaker than expected, mostly due to the Ebitda margin contraction and top line slightly below our estimates,” Bradesco BBI analysts Luis Azevedo and Tales Freire wrote in a research note today. “We were expecting a spike in results due to seasonal variation, which did not happen.”

Totvs has advanced 39 percent in the past year, while the MSCI Brazil Index (MXBR) fell 14 percent in the same period.

To contact the reporter on this story: Julia Leite in New York at jleite3@bloomberg.net

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

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