SAO PAULO, July 19 (Reuters) - WEG SA, Latin America’s biggest maker of electric motors, posted a rise in second-quarter profit on Wednesday as recovering Brazilian demand and cost-cutting efforts improved operating margins.
Second-quarter net income rose 7 percent to 272 million reais ($86 million), according to a securities filing. Profit narrowly missed an average estimate of 286 million reais from analysts surveyed by Thomson Reuters.
WEG shares hit a two-month high in early trading before slipping 0.5 percent.
A gradual recovery in domestic demand helped offset lower foreign revenue due to a stronger Brazilian currency, resulting in a 2 percent dip in net revenue.
“In Brazil, we began to see signs of recovery in the market, with the normalization of order intake in smaller, serial production, short cycle products,” WEG said in the filing.
Cost-cutting and more efficient production helped boost WEG’s gross profit margin 2.4 percentage points from a year ago to 29.9 percent.
Earnings before interest, taxes, depreciation and amortization rose 14 percent to 371 million reais, beating an average forecast of 353 million reais.
$1 = 3.15 reais Reporting by Alberto Alerigi Jr. and Bruno Federowski; Writing by Brad Haynes; Editing by Meredith Mazzilli