SAO PAULO (Reuters) -Brazilian motor maker WEG reported a 16.4% year-on-year rise in its first-quarter net profit on Wednesday, but fell short of market expectations as it warned about global uncertainties. WEG’s net profit in the January-March period reached 1.54 billion reais ($274 million), it said in a securities filing, while analysts polled by LSEG […]
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Brazil’s WEG warns of global uncertainty as Q1 earnings miss estimates
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SAO PAULO (Reuters) -Brazilian motor maker WEG reported a 16.4% year-on-year rise in its first-quarter net profit on Wednesday, but fell short of market expectations as it warned about global uncertainties.
WEG’s net profit in the January-March period reached 1.54 billion reais ($274 million), it said in a securities filing, while analysts polled by LSEG expected a bottom line of 1.78 billion reais.
The figure was also down 8.8% on a sequential basis.
WEG, which has operations in over 40 countries and plants in 17, acknowledged there is uncertainty in the geopolitical landscape, saying that although demand remains positive, the “global macroeconomic scenario requires attention.”
Companies around the world have been bracing for the impacts of U.S. President Donald Trump’s sweeping tariffs, which have sparked a trade war and led businesses to warn of growing uncertainty and concerns about the global economy.
WEG said, nonetheless, that it remains confident in its business model, citing its global presence and diversification of products and solutions.
“This combination, coupled with exposure to businesses with good long-term prospects, helps mitigate risks during periods of oscillation,” said the motor maker, which reports sales in regions rather than individual countries.
WEG said the first-quarter results reflected positive dynamics in its long-cycle business, which makes equipment used in large projects such as transmission lines and wind power, as well as the contribution of recent acquisitions.
WEG’s net revenue for the quarter reached 10.08 billion reais, a 25.5% year-on-year increase, although below the 10.49 billion reais forecast by analysts and down 6.9% on a quarterly basis.
The firm’s closely watched EBITDA margin fell by 40 basis points year-on-year to 21.6%, also slowing from the 22.1% reported in the previous three-month period.
($1 = 5.6200 reais)
(Reporting by Gabriel Araujo and Alberto Alerigi Jr; Editing by Jan Harvey and Philippa Fletcher)