SAO PAULO (Reuters) -Brazilian motor maker WEG on Wednesday reported a 10.4% year-on-year rise in its second-quarter net profit, but missed market forecasts amid what it called elevated volatility in global economics.
The lower-than-expected figures raise further uncertainty for WEG, which analysts have cited among the companies most exposed to the 50% tariff U.S. President Donald Trump said he would impose on Brazilian goods from August 1.
WEG reported a net income of 1.59 billion reais ($285.8 million) for the quarter, falling short of the 1.76 billion expected by analysts in an LSEG poll.
Net revenue reached 10.2 billion reais, a 10.1% year-on-year increase, while core earnings as measured by EBITDA rose 6.5% to 2.26 billion reais. Analysts expected them to come in at 11.16 billion and 2.49 billion reais, respectively.
WEG said the year-on-year growth was explained by a “solid performance” in the transmission and distribution infrastructure side of its long-cycle business, which makes equipment used in large projects such as transmission lines.
“We were able to maintain the consistent growth and profitability of our businesses, even in a global political and economic scenario marked by uncertainty and high volatility,” WEG’s management said in a statement.
The firm’s closely watched EBITDA margin, nonetheless, fell by 80 basis points year-on-year to 22.1%.
The company did not specifically address Trump’s threatened tariffs, but reiterated confidence in its business model over the long-term, saying that it has financial flexibility as it continues to monitor market risks.
“Our global production presence, diversified product portfolio and presence in many segments are fundamental to our business strategy, and allow us to quickly react to changing scenarios and mitigate possible macroeconomic impacts,” it said.
WEG has plants in over a dozen countries, including the United States and Mexico.
($1 = 5.5643 reais)
(Reporting by Gabriel Araujo and Michael Susin; Editing by Jan Harvey and Chizu Nomiyama )
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