CTEEP Falls After Posting Biggest Loss in at Least Eight Years
Shares of CTEEP, as the utility is known, declined 5.1 percent to 31.73 reais at the close in Sao Paulo, the most in four months. Brazil’s benchmark Ibovespa index fell 1 percent.
CTEEP reported a third-quarter loss of 245.3 million reais ($112.5 million) in a filing yesterday, its biggest deficit in Bloomberg data going back to 2005. The company set aside 516.3 million reais to cover possible losses related to a lawsuit against Sao Paulo state that sought reimbursement for some labor costs. The company said in the filing that a Brazilian court had dismissed its suit.
Booking the loss may be a sign that CTEEP believes “the possibility of collecting those amounts is lower now,” Marcelo Britto, Kaique Vasconcellos and Marcello Scarparo, analysts at Citigroup Inc., wrote in a note to clients today. Citigroup cut its recommendation on the stock to the equivalent of hold from buy.
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