SAO PAULO (Reuters) - Latin American e-commerce giant MercadoLibre ( MELI ) posted on Wednesday a 44% net profit increase in the first quarter from a year earlier, above analysts' estimates as operations in Argentina bounced back.

MercadoLibre ( MELI ), Latin's America most valuable company by market capitalization, posted a net profit of $494 million for the quarter ended in March, above the $420.9 million seen in an LSEG poll of analysts.

MercadoLibre ( MELI ) said in an earnings statement that Argentina was the main highlight of the quarter, with its sales in the country as measured by Gross Merchandise Value (GMV) growing 126% on a foreign-exchange neutral basis, compared to a total GMV increase of 40%.

Chief Financial Officer Martin de los Santos told Reuters that a weaker comparison base helped its Argentine operations year-on-year due to the initial impacts of a devaluation of the peso currency in late 2023.

Lower inflation and interest rates also drove greater sales and appetite for credit in the nation, he added.

"We have seen improvements on our platforms (in Argentina) in the last few quarters and they continued in the first quarter," he said.

The strong numbers out of Argentina bumped it back up to MercadoLibre's ( MELI ) No. 2 market by revenues, de los Santos said, overtaking Mexico and behind top dog Brazil. Argentina had lost the position last year.

MercadoLibre ( MELI ), which relies on its e-commerce marketplace and fintech Mercado Pago for most of its revenue, posted total revenues at $5.9 billion, up 37% year-on-year, also beating analysts' expectations of $5.51 billion.

MercadoLibre ( MELI ) has been delivering mostly consistent beats to market estimates in recent years, amid heavy investments across Latin America, a strategy that has also sparked some investor concern over short-term profitability.

Its earnings before interest and taxes (EBIT) came in at $763 million, above the $617.4 million forecasted by analysts and a 45% increase year-on-year. Its EBIT margin stood at 12.9%, up from the 12.2% reported a year earlier.

On the fintech front, MercadoLibre ( MELI ) grew its credit portfolio 75% year-on-year to $7.8 billion, driven especially by credit cards. It was at $6.6 billion in December.

Meanwhile, the 15-to-90 days default ratio stood at 8.2%, up 0.8 percentage points quarter-on-quarter and down from 9.3% a year ago.