SAO PAULO, May 2 (Reuters) - Latin America e-commerce

giant MercadoLibre ( MELI ) said on Thursday its first-quarter

net profit surged 71% from a year earlier, beating analysts'

estimates as its performance in Brazil and Mexico offset some

negative effects in Argentina.

MercadoLibre ( MELI ), which operates a marketplace in 18 countries

and also owns the fintech Mercado Pago, posted a $344 million

net profit in the three months, while analysts polled by LSEG

had expected a $314 million net profit.

The firm disclosed some changes in reporting, including

reclassification of Mercado Pago interest income and expense

lines, with a $99 million positive impact on net revenue but no

impact on net income. The changes also include a swap in the

terms and conditions of Mercado Envios, which had a negative

impact of $10 million on net income.

MercadoLibre ( MELI ) reported a $4.3 billion net revenue, up 36%

from a year earlier and above the $3.9 billion estimated by

analysts.

Sales from its main marketplace business rose 36% in Brazil,

its top market, and 42% in Mexico, as measured by Gross

Merchandise Value (GMV).

Operational margins, which analysts had negatively

highlighted last quarter after higher logistics costs during the

year-end peak, came in at 12.4%, up from the 11.2% a year

earlier, without including the reporting changes.

CFO Martin de los Santos told Reuters that Argentina's

macroeconomic situation had hurt margins, as a sharp currency

devaluation late last year weighed on logistic costs and shrank

its business there. Still, Brazil's and Mexico's performance

have enabled a expansion year-on-year.

"We obviously continue to run a profitable business in

Argentina. It's just that is not as profitable as it used to

be", Santos said.

Argentina, where MercadoLibre ( MELI ) was founded, represented 15%

of its earnings before interest and taxes (Ebit) in the first

quarter, from over 50% a year earlier.

MercadoLibre ( MELI ) posted a total $528 million Ebit for the

quarter, rising 29% from a year earlier, beating analysts'

forecasts of $488 million.

For its fintech unit, MercadoLibre ( MELI ) increased its credit

portfolio by more than $600 million from the previous quarter,

the most since early 2022, to $4.4 billion. The lower-term

delinquency rate rose to 9.3% from 8.2% in December, but over-90

days rate fell to 17.9% from 18.7%.

"The fact that we have better delinquency rates and better

profitability enable us to be more confident in growing our

origination in consumer and merchant grades," Santos said..