MercadoLibre Slides 10%+ After Earnings Miss
Wall Street Cheat Sheet submits:
Shares of Buenos Aires-based MercadoLibre, Inc. (MELI) sold off hard during after-hours trading Monday following a narrow earnings miss. The “Latin American eBay (EBAY),” as some refer to it, reported EPS of $0.26 on revenue of $49 million, coming in shy of estimates on both accounts (see transcript here upon availability). Street consensus called for EPS of $0.27 on revenue of $59 million. Shares, which finished regular trading down 2%, are down an additional 10% after-hours.
Perhaps the greatest motivator behind the earning shortfall was a negative currency impact due to Hugo Chavez’s decision to devalue the Bolivar on Jan. 9th. MELI, which does significant business in Venezuela, decided to translate financial results from its Venezuelan operations at the “parallel” exchange rate of 5.67 bolivars instead of the official rate which was 2.15, and is now 4.3. Excluding the impact of these changes, revenue for the quarter would have come in at $56.0 million. This would have been much closer to consensus estimates, not to mention a 67.5% YOY gain.
Investing, Long Term Investment, stock market | admin February 23, 2010
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