MRV Leads Bovespa Lower on Disappointing Profit: Sao Paulo Mover

MRV Engenharia & Participacoes SA, Brazil’s second-biggest homebuilder by market value, fell the most on the country’s benchmark index as profit missed estimates for a fifth straight quarter as sales declined.

The shares slid 7.9 percent to 9.82 reais at 2:39 p.m. in Sao Paulo, the lowest level on a closing basis since Nov. 16. The benchmark Bovespa index slid 0.3 percent.

MRV’s adjusted net income fell 35 percent to 115.4 million reais ($58.5 million) in the fourth quarter from a year earlier, according to data compiled by Bloomberg, based on a company report yesterday after markets closed. The figure compares with the average estimate of 144.4 million reais among nine analysts surveyed by Bloomberg.

Grupo BTG Pactual cut its recommendation on the Belo Horizonte-based company’s stock to the equivalent of hold from buy because of “weak” results and a “more challenging outlook for 2013,” according to a note today from the firm. The main risks for the industry this year include sensitivity to interest rates and the “overall availability of mortgage finance,” BTG analysts Marcello Milman and Gustavo Cambauva wrote in the note.

Price increases “seem to have taken a toll on affordability for the company’s clients, particularly as consumers become more leveraged, leading to a lower sales speed in 2012,” the analysts wrote.

Sales retreated 12 percent to 1.02 billion reais, according to the company.

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