Brazil’s Interventionist Policies Fail to Boost Corporate Earnings

“A majority of Brazilian companies missed earnings estimates for a third straight quarter, signaling President Dilma Rousseff’s interventionist policies have failed to spark the economic rebound she is seeking.

Fifty-eight percent of the 62 companies on the Bovespa index that reported third-quarterearnings have trailed analysts’ forecasts, according to data compiled by Bloomberg. Sixty-two percent fell short of projections in the second quarter this year, and 60 percent missed estimates in the first.

Rousseff’s pressure to boost consumer credit at lower costs hurt profits at lenders includingItau Unibanco Holding SA (ITUB4), Latin America’s largest, as three of the four banks that have reported posted quarterly earnings that were below projections. Pulp producer Suzano Papel & Celulose SA missed estimates by the widest margin, leading disappointments among materials producers as a slowdown in China, Brazil’s biggest trading partner, led to a 12 percent drop in exports.”

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