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Ternium Plunges on Lower Earnings Outlook: Buenos Aires M

Ternium SA, Latin America’s second-largest steelmaker, declined after fourth-quarter profit missed analysts’ estimates and it forecast lower operating income for this quarter.

Ternium’s American depositary receipts fell 1 percent to $22.27 in New York at the close. The Luxembourg-based company declined as much as 11 percent, the most intraday since Nov. 28, when the company bought a stake in Brazilian steelmaker Usinas Siderurgicas de Minas Gerais SA.

Ternium forecast operating income will fall in the three months through March from the fourth quarter as shipments remain “relatively stable” and costs rise, according to a statement today. The company expects weaker shipments in Argentina and higher sales in Mexico.

“It was a negative surprise that they’re expecting a worse result for the first quarter,” Christian Reos, an analyst at Allaria Ledesma & Cia. brokerage in Buenos Aires, said by telephone today. “I expected stable costs and the company said costs are going to rise.”

Net income attributable to shareholders rose to $104.7 million, or 53 cents per American depositary share, from $77.5 million, or 39 cents, a year earlier, according to the statement. Earnings of 53 cents per ADR included a 25 cent foreign-exchange loss.

The company was expected to post profit of 59 cents a share, the average of five analysts’ estimates compiled by Bloomberg.

Ternium plans to boost investment to about $1 billion this year from $600 million in 2011, Chief Financial Officer Pablo Brizzio said on a conference call today. This year’s capital expenditure includes about $250 million in Argentina, he said.

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