SANTIAGO, Nov 7 (Reuters) - LATAM Airlines is expected to leave behind a cycle of poor earnings and finally enjoy the fruits of its merger to post a solid bottom line over a year after the region's largest carrier was created.
LATAM, the product of Chilean flagship airline LAN's takeover of Brazil's TAM, is seen posting net profit of $47 million for the third quarter, according to the median estimate of five brokerages surveyed by Reuters.
That would compare to a loss of $64 million reported for the same quarter last year, later revised to a loss of $49 million.
"LATAM has reached an expected inflection point in its earnings," Santiago-based Bice Inversiones said in a note to clients.
Headwinds from Brazil's weak economy have weighed on LATAM's earnings and share price.
Following the merger, the shares lost over half their value, but have recovered some ground in recent weeks, in anticipation of improved results.
The airline has posted losses in four of the five quarters since the tie-up, due to higher-than expected merger costs and weakness in Brazil's real currency and domestic market.
The group reported a loss of $330 million in the three months to June 2013. Its only profitable quarter was the three-month period ending in March 2013, when its bottom line was cut in half to $43 million.
Last month, however, LAN's Chief Executive Ignacio Cueto said that LATAM is making "solid" progress in Brazil as it seeks to improve its performance in South America's largest economy.
The airline, which has cut its TAM workforce by around 4 percent in recent months, is looking to spend around $11 billion to boost its fleet.
To that end, it is making efforts to wrap up a planned $1 billion capital increase in December, Cueto said.
In August, the airline faced problems in Argentina when authorities ordered LAN Argentina to vacate its hangar at Buenos Aires' domestic Aeroparque airport, although a local judge has since frozen the order.
LATAM Airlines is due to report its Q3 earnings on Nov. 11.
(Reporting by Felipe Iturrieta; Additional reporting by Roberta Vilas Boas in Sao Paulo; Writing by Anthony Esposito; Editing by Bernard Orr)