CMPC Falls in Chile as Higher Costs Lead to Profit Drop

Empresas CMPC SA, Chile’s second-largest pulp exporter, fell the most in three weeks after reporting an unexpected drop in second-quarter profit on higher costs in its forestry and tissue divisions.

CMPC retreated 4.2 percent to 1,489 pesos at 3:53 p.m. in Santiago, the most since Aug. 6 on a closing basis. The country’s benchmark IPSA index lost 2.2 percent.

Profit in the three months through June fell 21 percent from a year earlier to $30.6 million, according to a filing yesterday. That compares with the $88.4 million average of four analyst estimates compiled by Bloomberg. Banco Santander SA attributed the difference to higher distribution costs in the forestry division and expenses related to the opening of new plywood and tissue plants.

“We expect an unfavorable market reaction to this negative surprise and continue to wait for an improvement in earnings visibility before becoming more constructive on the name,” Banco Santander analysts Rodrigo Ordonez and Francisco Errandonea said in an e-mailed note.