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Shares climb more than 9%

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Argentina weakness in year-ago period aided comparison

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Sales in Argentina grew 126% on currency-neutral basis

(Adds share price move in paragraph 3 and analyst comments in

paragraph 12)

SAO PAULO, May 7 (Reuters) - Latin American e-commerce

giant MercadoLibre ( MELI ) posted on Wednesday a 44%

first-quarter net profit increase 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.

Its stock rose 9.1% to about $2,468 in extended trade in the

United States.

Uruguay-headquartered 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 in Argentina bumped it back to

MercadoLibre's ( MELI ) No. 2 market by revenues, de los Santos said,

overtaking Mexico and behind top dog Brazil.

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.

Analysts at BTG Pactual said that operating leverage and

better efficiency were offsetting investments in credit growth.

In a note to clients, they said the results were better than

expected, noting the EBIT and net profit strength, as well as a

"strong print" in credit.

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.