Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

MRV Slumps to Four-Year Low as Net Income Trails Estimates

May 14 (Bloomberg) -- MRV Engenharia & Participacoes SA, Brazil’s second-largest homebuilder by market value, slumped to a four-year low after first-quarter profit trailed analysts’ estimates as customers canceled purchases they couldn’t finance.

The shares fell for a fourth day, tumbling 6.7 percent to 7.47 reais at the close of trading in Sao Paulo, the lowest since June 2009. The benchmark Ibovespa gauge gained 0.4 percent today.

First-quarter adjusted net income was 79 million reais ($39 million), according to data compiled by Bloomberg after the company released results yesterday. That compares with the average estimate of eight analysts for adjusted net income of 125.3 million reais.

“The main negative came from sales cancellations that were reported for the first time,” Eduardo Silveira, an analyst at BES Securities Brazil, wrote in a research note. “There is a risk that delinquency rates and the number of clients becoming ineligible for mortgages might rise in the low-end segment.”

Canceled orders in the first quarter were worth 232.6 million reais, 96 percent of which were by customers who couldn’t finance purchases, Belo Horizonte, Brazil-based MRV said in a statement. About 90 percent of MRV’s houses and apartments are sold through the government’s financing program known as “My House, My Life,” designed for families earning as much as 5,000 reais a month.

MRV has lost 38 percent this year while the BM&FBovespa Real Estate index has declined 11 percent and the Ibovespa has dropped 10 percent.

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

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.