UPDATE 1-Brazilian builder MRV misses profit estimate, shares slide
(Adds executive, analyst comments, share moves))
By Asher Levine
SAO PAULO, March 14 (Reuters) - Shares of Brazilian homebuilder MRV Engenharia e Participacoes SA tumbled to their lowest level in seven months on Friday after the company posted a sharp drop in fourth quarter net income.
MRV said its profits fell 37.2 percent to 72 million reais ($30.5 million) in the quarter on an annual basis, driven lower by a spike in sales cancellations, which reached 24.1 percent of total sales value from 19.1 percent in the third quarter.
The quarterly profit, reported late on Thursday, was far short of the average analyst estimate of 130 million reais, according to a Reuters poll of eight analysts.
"The earnings miss and, more importantly, the higher sales cancellations should be a source of concern," Credit Suisse analysts led by Nicole Hirakawa wrote in a client note.
Investors punished Belo Horizonte-based MRV, driving its shares down 12 percent to 7.36 reais in afternoon trading, the biggest drop in the company's stock for nearly two years.
"Revenue in the fourth quarter was a little lower, the amount of cancellations were a bit higher than they had been, which ended up affecting the results," Chief Financial Officer Leonardo Correa told Reuters on Thursday.