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Cemex Shares Decline After Reporting Fourth-Quarter Loss (1)

Feb. 7 (Bloomberg) -- Cemex SAB dropped the most in more than four months after the largest cement maker in the Americas reported a fourth-quarter loss that Deutsche Bank AG called a disappointment.

The shares fell 4.3 percent to 13.22 pesos at 9:51 a.m. in Mexico City trading, after declining as much as 4.6 percent for the biggest intraday drop since Sept. 14.

Cemex has reported 13 straight quarterly losses, battered by a slump in the U.S. construction market after its $14.2 billion acquisition in 2007 of Rinker Group Ltd., which drew more than 80 percent of its sales from the U.S. The fourth- quarter net loss was $489 million, compared with $761 million a year earlier, the Monterrey, Mexico-based company said today in a statement.

Revenue of $3.71 billion trailed the $3.74 billion average of analysts’ estimates compiled by Bloomberg. Operating earnings before interest, taxes, depreciation and amortization, a measure of profit known as Ebitda, climbed 13 percent to $610.8 million. Free cash flow slid 54 percent to $143 million.

Net income and free cash flow “disappoint,” Esteban Polidura, a Deutsche Bank analyst based in Mexico City, said today in a note.

“Ebitda was ok but net income and free cash flow were below expectations, hit by impairments, losses on asset sales, and high capital expenditures,” Polidura, who has a buy rating on the shares, said in an e-mail.

U.S. Improvement

Polidura also said Cemex had “weak results” in Mexico, hurt by housing. Net income was dragged down by “severance payments, impairments, and losses in sales of fixed assets,” he said.

Sales climbed 16 percent in Central America, South America and the Caribbean, and 11 percent in the U.S., Cemex said. Housing starts in the U.S. reached an annual rate of 954,000 in December, the highest since June 2008 and double their April 2009 low.

The company’s U.S. unit reported a profit before interest, taxes, depreciation and amortization for the third quarter in a row.

“It’s very nice to see the U.S. with positive Ebitda even though it’s a seasonally weak quarter,” Carlos Hermosillo, an analyst with Grupo Financiero Banorte SAB who has a buy rating on the shares, said in a telephone interview from Mexico City. “The reduction in debt looks good, even a little better than I expected.”

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