Salient to Investors:
Q3 earnings of 58 percent of 62 companies on the Bovespa index missed analysts’ estimates versus 62 percent that missed in Q2 and 60 percent that missed in Q1. 67 percent reported sales higher than expected – Rodolfo Amstalden at Empiricus Research said the divergence is in part due to increasing costs in a tight labor market. Analysts expect earnings growth of 7.8 percent in Q4 from a year ago.
Intl money managers sold a net $2.6 billion of equities in the past two months, the biggest outflows since Lehman in 2008. The average P/Est for the Bovespa Index is at 16.5 versus 9 in October 2011 as profits tumbled.
Paulo Hegg at Blue Star Private said government policies to encourage consumption have had the opposite effect.
Jose Francisco Cataldo at Agora CTVM said Brazil is not growing as much as expected, but unemployment remained low and inflation did not escalate, so household income remained high.
Fausto Gouveia at Legan Administracao de Recursos expects stronger growth in 2013 growth as we see results from government actions in the coming months.