(Adds earnings details, share performance)
By Carolina Mandl
SAO PAULO, Jan 28 (Reuters) - Brazilian card processor Cielo SA missed analysts’ forecasts for the fourth quarter amid fierce competition among payment solution companies in Brazil.
Cielo on Monday reported net income of 724.1 million reais ($192.51 million) in the fourth quarter, down 30.6 percent from the same period one year earlier and below a Refinitiv analyst consensus of 892.3 million reais.
To fight back upstarts such as rivals PagSeguro Digital Ltd and StoneCo Ltd and retain market share, Cielo has lowered its pricing and increased sales expenses.
As a result, the number of credit card readers at stores using Cielo rose 9.7 percent in the fourth quarter to 162,000.
Still, the company missed its target for financial volume of debit and credit card transactions in 2018. Cielo sought a growth rate between 5 percent and 7 percent, but financial volume expanded only 3 percent.
Cielo’s earnings is likely to resume growth again only in 2021, according to estimates by analysts at Brasil Plural.
Cielo has been under the helm of a new chief executive since Nov. 5, when former Banco do Brasil CEO Paulo Caffarelli took the reins of the company. Former Cielo’s CEO Eduardo Gouveia resigned in July.
Shares in Cielo are up 22.5 percent this year, but the company’s market value is still roughly half of what it was a year earlier.
$1 = 3.7614 reais Reporting by Carolina Mandl; Editing by Dan Grebler and Sandra Maler