Brazil's hopes of restoring national pride after its disastrous 2014 World Cup exit were cruelly dashed after losing a penalty shootout to Paraquay to exit the Copa America Saturday at the quarterfinal stage.

The match had ended 1-1 in regulation play before underdog Paraguay won the shootout 4-3 to send Dunga's men home. It was a repeat of the result when the two teams met at the 2011 Copa, also in the last eight.

A 1-0 defeat to Colombia in the group stages and the ban on star player Neymar after he received a needless red card, preceded its exit.

Dunga, in his second spell in charge of the Selecao, tried to put a positive spin on the defeat, but will face criticism at home.

"It is preparation, a good experience," he told gathered reporters.

"We would like to win but it is a great lesson, learning for the highest purpose of the tie as we look at the World Cup in 2018."

The former 1994 World Cup winning captain also blamed a virus which he claimed had left his squad feeling under the weather.

"I'm not making excuses, but around 15 players had viruses which limited our training," Dunga said.

Brazil certainly gave a lackluster performance after taking a 15th minute lead through a sparkling goal from Robinho and dominating the first half.