UPDATE 3-Ambev's first-quarter profit beats estimates as Brazilian home market does well

(Adds analyst comment in paragraph 5 and 6)

By Natalia Siniawski

May 8 (Reuters) - Brazilian brewer Ambev SA posted a small decline in net profit for the first quarter but the result handily beat expectations on a positive performance in its home market.

In Brazil, volumes grew by 3.6% benefiting from Carnival festivities with sales led by its Corona, Spaten and Original brands. By contrast, other parts of South America were weaker with sales in Argentina tumbling 19% due to a tough economic environment.

Net profit for the Anheuser-Busch InBev unit fell 0.4% to 3.8 billion reais ($749 million). That compares with an LSEG consensus estimate for a 9.9% decline.

Overall sales were flat in volume terms but revenue fell 1.2% to 20.28 billion reais.

Analysts at XP Investimentos said that leading beer volumes in Brazil, "which in the past could have been a catalyst" for the firm, were "not anymore, considering soft international operations and uncertainty on taxes".

These uncertainties could prompt investor caution, the analysts added, saying the results showed a "positive though non-exciting quarter".

Ambev is Brazil's fourth-largest company by market capitalization, behind oil giant Petrobras, miner Vale and lender Itau.

($1 = 5.0744 reais) (Reporting by Natalia Siniawski; Editing by Edwina Gibbs and Chizu Nomiyama)