Surprising news out of Argentina today: Ternium (NYSE:TX), a steel maker with operations in Argentina and Mexico, reported a 15% rise in net income (year on year).

But here’s the thing. That 15% rise is overshadowed by the fact that its net income of $247 million is only half that from the previous quarter. The main reason for this drop? Lower net foreign exchange results.

This wierd fluctuation is seen in the company’s EBITA. This figure grew 101% year over year in the third quarter, but is down 11% from the second quarter.

Next quarter, the company expects further contraction in income, which doesn’t bode well.

These kinds of earnings reports are going to become more prevalent, I think… So long as major currencies continue to seesaw back and forth.

You see, most international exporting companies have to hedge themselves against their own currencies. But with the global mayhem shoving some denominations higher and knee-capping others, it’s obvious that some companies are going to be left holding the short end of the stick.

Argentina’s in that bracket.

(By the way, Argentina’s lower house of parliament has backed the government’s plan to nationalize the $30 billion pension fund. It will next go to the upper house, where it’s expected to quickly pass.)

As you know, I’ll be travelling to Chile and Argentina later this month.

It will be interesting to contrast the two countries. Chile seems much more stable at this point. As evidence, its state-owned copper company, Codelco, just reported that its Gaby mine is now at full production and will start to expand its capacity from 150,000 tons a year to 170,000 tons over the next two years.

Does Chile have problems? Yeah, sure… It’s Consumer Price Index jumped sharply in October, and the government expects to used $1.5 billion to help combat the global financial crisis.

But Chile is also enjoying lower oil prices and a relatively cheap currency, which is good for export companies.

On the whole, I expect Chilean companies to outperform Argentine companies. For how long? That I’m not sure about yet, but I expect to get some answers on my trip. You can follow me, by the way… I’ll be providing updates through Twitter and this blog. You can also sign up to receive a video of my travels upon my return.

Source: Mining Prospects: South American Mining on a Run