Brazil earnings misses may rise as recession, politics bite

viernes 1 de abril de 2016 06:00 GYT

By Paula Arend Laier

SAO PAULO, April 1 (Reuters) - Brazilian listed companies could miss earnings estimates for the first quarter after dismal fourth- quarter results as they wrestle with a deep recession, mounting debts and escalating political turmoil, analysts said on Friday.

The earnings reporting season is due to kick off on April 15.

According to Carlos Sequeira, BTG Pactual's head strategist, companies in the oil and gas, mining, retailing, steelmaking and homebuilding sectors fared worst in recent quarters.

While he did not provide indications on first-quarter performance, he noted that singling out a sector with good results is hard at this point.

Earnings misses by Brazilian companies have increased over the last year despite diminished expectations as the economy slipped into recession two years ago. Analysts at Itaú BBA said that of the 122 Brazilian companies they cover, 37 percent posted earnings misses in the fourth quarter, compared with 18 percent a year earlier.

The share of earnings beats fell to 23 percent from 39 percent in the same period, Itaú BBA said.

"Even as analysts revised their earnings views downwards across the board, fourth-quarter numbers came in at way worse than everyone expected," said Lucas Tambellini, an equity strategist with Itaú BBA.

While strategists do not rule out positive surprises, especially since annual and quarterly comparison bases have been slashed severely recently, economic and corporate data are keeping analysts wary.   Continuación...