This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Brazil's Hot Economy Boosts Sales

NEW YORK ( TheStreet) -- Brazil's economy expanded 9% in the first quarter and is expected grow by 7.2% in 2010, according to the country's central bank. Brazil's hot economy, accompanied by low inflation, boosted domestic companies' sales during the second quarter. Ultrapar Participacoes (UGP - Get Report), Companhia Siderurgica Nacional (CSN) (SID - Get Report), and CPFL Energia (CPL - Get Report) posted earnings surprises for the quarter and noted Brazil's robust economy as the prime reason.

Ultrapar is a leading conglomerate with businesses in fuel distribution (Ultragaz/Ipiranga), chemicals (Oxiteno) and storage for liquid bulk (Ultracargo). In August 2008, Ultrapar acquired Chevron (CVX - Get Report) Texaco's fuel distribution business in Brazil.

Ultrapar's sales and net earnings zoomed 55% and 54%, respectively, in the second quarter compared with a year earlier period. "Our businesses continue to reap the benefits from a more favorable economic environment, highlighting the improvements in Oxiteno's earnings this quarter," said Chief Executive Pedro Wongtschowski.

CSN, an integrated steel producer in Brazil, reported a net profit BRL 894 million, up 167% from the BRL 335 million reported for the second quarter of 2009. Robust demand for steel on the country's hot economy led to a 45% increase in sales volume in the domestic market compared to a year earlier. In addition, CSN is better placed than its international counterparts due to larger vertical integration that protected the company from increasing raw material costs.

CPFL, the country's biggest non-state utility company, reported a 33% increase in second-quarter profits to BRL 384 million from BRL 289 million from a year earlier period. Meanwhile, earnings surpassed the the BRL 373 million consensus estimates of analysts. Ramp up in the industrial production during the quarter on Brazil's robust economy boosted electrical consumption. In addition, the company reduced costs by 5.3% and paid 7.4% less for energy it resold to customers.

Meanwhile, Brazil power company Companhia Paranaense de Energia (Copel) (ELP - Get Report) reported an increase in operating revenues by 6.8% compared to a year earlier. Increase in expenses led to a decline a 53.2% fall in second-quarter profits.

However, Brazil's chemical industry is still facing difficult times in the global markets due to cost-efficiency and demand growth rates in China and the Middle East. Braskem (BAK - Get Report), the country's leading chemical company, reported net profit at BRL 45 million as against the BRL 1.15 billion a year earlier. Drastic reduction in profits is attributed to the increase in debt-service costs. Financial expense for the quarter stood at BRL 771 million compared to the BRL 1.5 billion reported in the year-ago period.
Karvy Global Services (, a subsidiary of the Karvy group (, provides specialized research in asset classes including stocks, mutual funds and insurance to leading Wall Street firms.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAK $14.25 0.00%
CPL $11.58 0.00%
CVX $102.18 0.00%
ELP $8.27 0.00%
SID $3.78 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs