(Adds details from statement, comment from CEO)
RIO DE JANEIRO, March 4 (Reuters) - Brazilian steelmaker Gerdau SA on Wednesday posted quarterly earnings that beat economists’ estimates, sending its shares rallying more than 4 percent on the Sao Paulo stock exchange.
Gerdau, the largest long-steel producer in the Americas, reported fourth-quarter net income of 393 million reais ($132 million), a 20 percent drop from the previous year but above the 210 million real estimate by economists in a Reuters poll.
Shares of the company jumped 4.6 percent, leading gains in Brazil’s benchmark Bovespa index.
Gerdau’s sales dropped in line with an economic slowdown in Brazil and other Latin American countries, but a weaker real boosted foreign currency revenue from Gerdau’s U.S. operations and from exports.
“The year of 2014 was challenging for Gerdau and the steel industry, mainly due to excess global capacity and lower demand in key markets such as Brazil and other Latin American countries,” Chief Executive Andre Gerdau Johannpeter said in a statement.
The steelmaker said it plans to invest 1.9 billion reais this year in equipment maintenance and productivity improvements, compared to 2.3 billion reais in 2014.
For the full year of 2014, Gerdau posted net profit of 1.5 billion reais, compared with an analyst average estimate of 1.2 billion reais.
Gerdau has weathered the fall in Brazilian steel demand better than its peers due to a large presence in the United States, where margins have remained strong.
$1 = 2.97 reais Reporting by Walter Brandimarte; Editing by W Simon and Phil Berlowitz