Bloomberg News

CSN Sinks After Missing Profit Estimates on Costs: Rio Mover

May 11, 2012

Cia. Siderurgica Nacional SA (CSNA3), Brazil’s third-largest steelmaker, dropped the most in five months after first-quarter profit missed analysts’ estimates.

CSN, as the Sao Paulo-based company is known, fell 3.7 percent to 14.56 reais at the close today, its biggest decline since Dec. 8. The stock declined 2.8 percent during 2012, underperforming the 4.7 percent increase of the Brazilian benchmark Bovespa index.

CSN’s first-quarter net income slumped 82 percent to 110.7 million reais ($56.7 million), or about 8 centavos a share, from 617.5 million reais, 42 centavos, a year earlier, the company said in a statement late yesterday. It was expected to post profit excluding some items of 446.6 million reais, according to the average of nine analyst estimates compiled by Bloomberg.

The earnings decline came as the steelmaker’s net revenue rose 2.8 percent in the quarter to 3.9 billion reais, less than the 23 percent increase in the cost of goods sold. Sales at its iron-ore business, its most profitable unit, fell 1.3 percent.

“The main miss was thanks to iron ore, which saw dismal sales,” Edmo Chagas and Antonio Heluany, analysts at Banco BTG Pactual SA, said in a note to clients today. “While we believe iron-ore volumes will improve and costs will come down, we do not see these factors as capable of meaningfully widening operating margins.”

Iron-ore shipments from Brazil, the world’s second-largest exporter of the steelmaking ingredient, were curtailed this year after heavy rain in the southeast. Gerdau SA and Usinas Siderurgicas de Minas Gerais SA, the two largest Brazilian steelmakers, also missed first-quarter analysts’ estimates amid a global steel glut.

To contact the reporter on this story: Juan Pablo Spinetto in Rio de Janeiro at

To contact the editor responsible for this story: Dale Crofts at

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