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The Zacks Consensus Estimate for Vale’s first-quarter sales is pegged at $10.1 billion, indicating a decline of 6.6% from the year-ago quarter. The consensus mark for earnings has moved down by 10% to 60 cents over the past 30 days. The figure suggests a slump of 23% from the prior-year quarter.
Q4 Results
Vale’s fourth-quarter earnings per share and revenues came in lower than the year-ago quarter due to a decline in iron ore prices. The company, however, beat the Zacks Consensus Estimate on both metrics. The company has delivered an average surprise of 22.2% over the trailing four quarters.
Vale recently provided a first-quarter 2022 production update on how the company is likely to fare in the to-be-reported quarter. Iron ore production was around 66.7 million tons in the first quarter, up 5.8% year over year. This was aided by a stronger operational performance at S11D and lower rainfall in Minas Gerais.
Iron ore fine sales were down 10.6% year over year to 45.9 million tons. Total sales volumes of iron ore fines and pellets were around 54 Mt. This represented a 7% drop from the first quarter of 2022 and was mainly attributed to loading restrictions in the Northern System during the rainy season and supply chain rebalancing following the strong sales in fourth-quarter 2022.
Iron accounts for around 80% of Vale’s revenues. The company reported that the realized price for iron ore fines was down 23% year-over-year to $108.6 per ton. The decline was due to lower benchmark prices, a negative effect of pricing adjustment mechanisms and lower fines premiums. Realized prices for iron ore pellets were down 16.5% compared with the last year’s quarter, owing to lower benchmark prices and the net effect of lower market premiums. Lower year-over-year sales volumes and lower realized prices for iron ore are expected to get reflected in Vale’s first-quarter results.
Nickel sales were up 3% year over year to 40.1 kt. Vale sold 62.7 kt of copper, which came in 24.7% higher than the last year’s quarter. Average realized prices for nickel increased 13.8% year over year, mainly as a result of higher premiums for Class I products and the positive impact of hedge. Average realized prices for copper declined 12.7%, owing to lower LME prices.
Even though Vale witnessed improved sales volumes as well as nickel prices, this gain is expected to have been offset by lower volumes for iron ore and pellets and lower iron ore and copper prices. The company has been facing higher input costs, particularly diesel and freight costs, which are likely to have weighed on its margins in the quarter to be reported. However, cost-control efforts may have negated some of this impact.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Vale this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. That is not the case here, as you will see below. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Vale is -25.00%.
Zacks Rank: The company currently has a Zacks Rank #3.
Price Performance
Image Source: Zacks Investment Research
In a year’s time, shares of Vale have fallen 14.5%, in-line with the industry.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
IAMGOLD Corporation (IAG - Free Report) , slated to release earnings on May 11, has an Earnings ESP of +7.69% and carries a Zacks Rank #3.
The Zacks Consensus Estimate for earnings for IAG for the first quarter is pegged at a loss of 4 cents.
The consensus estimate for FCX’s earnings for the first quarter is currently pegged at 45 cents.
Agnico Eagle Mines Limited (AEM - Free Report) , which is scheduled to release earnings on Apr 27, has an Earnings ESP of +18.47% and carries a Zacks Rank #3.
The consensus estimate for AEM’s earnings for the first quarter is currently pegged at 39 cents.
Image: Bigstock
Vale (VALE) to Report Q1 Earnings: What's in the Offing?
Vale S.A. (VALE - Free Report) is scheduled to report first-quarter 2023 results on Apr 26, after the closing bell.
Q1 Estimates
The Zacks Consensus Estimate for Vale’s first-quarter sales is pegged at $10.1 billion, indicating a decline of 6.6% from the year-ago quarter. The consensus mark for earnings has moved down by 10% to 60 cents over the past 30 days. The figure suggests a slump of 23% from the prior-year quarter.
Q4 Results
Vale’s fourth-quarter earnings per share and revenues came in lower than the year-ago quarter due to a decline in iron ore prices. The company, however, beat the Zacks Consensus Estimate on both metrics. The company has delivered an average surprise of 22.2% over the trailing four quarters.
VALE S.A. Price, Consensus and EPS Surprise
VALE S.A. price-consensus-eps-surprise-chart | VALE S.A. Quote
Factors to Note
Vale recently provided a first-quarter 2022 production update on how the company is likely to fare in the to-be-reported quarter. Iron ore production was around 66.7 million tons in the first quarter, up 5.8% year over year. This was aided by a stronger operational performance at S11D and lower rainfall in Minas Gerais.
Iron ore fine sales were down 10.6% year over year to 45.9 million tons. Total sales volumes of iron ore fines and pellets were around 54 Mt. This represented a 7% drop from the first quarter of 2022 and was mainly attributed to loading restrictions in the Northern System during the rainy season and supply chain rebalancing following the strong sales in fourth-quarter 2022.
Iron accounts for around 80% of Vale’s revenues. The company reported that the realized price for iron ore fines was down 23% year-over-year to $108.6 per ton. The decline was due to lower benchmark prices, a negative effect of pricing adjustment mechanisms and lower fines premiums. Realized prices for iron ore pellets were down 16.5% compared with the last year’s quarter, owing to lower benchmark prices and the net effect of lower market premiums. Lower year-over-year sales volumes and lower realized prices for iron ore are expected to get reflected in Vale’s first-quarter results.
Nickel sales were up 3% year over year to 40.1 kt. Vale sold 62.7 kt of copper, which came in 24.7% higher than the last year’s quarter. Average realized prices for nickel increased 13.8% year over year, mainly as a result of higher premiums for Class I products and the positive impact of hedge. Average realized prices for copper declined 12.7%, owing to lower LME prices.
Even though Vale witnessed improved sales volumes as well as nickel prices, this gain is expected to have been offset by lower volumes for iron ore and pellets and lower iron ore and copper prices. The company has been facing higher input costs, particularly diesel and freight costs, which are likely to have weighed on its margins in the quarter to be reported. However, cost-control efforts may have negated some of this impact.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Vale this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. That is not the case here, as you will see below. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Vale is -25.00%.
Zacks Rank: The company currently has a Zacks Rank #3.
Price Performance
Image Source: Zacks Investment Research
In a year’s time, shares of Vale have fallen 14.5%, in-line with the industry.
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
IAMGOLD Corporation (IAG - Free Report) , slated to release earnings on May 11, has an Earnings ESP of +7.69% and carries a Zacks Rank #3.
The Zacks Consensus Estimate for earnings for IAG for the first quarter is pegged at a loss of 4 cents.
Freeport-McMoRan Inc. (FCX - Free Report) , scheduled to release earnings on Apr 21, has an Earnings ESP of +4.19% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for FCX’s earnings for the first quarter is currently pegged at 45 cents.
Agnico Eagle Mines Limited (AEM - Free Report) , which is scheduled to release earnings on Apr 27, has an Earnings ESP of +18.47% and carries a Zacks Rank #3.
The consensus estimate for AEM’s earnings for the first quarter is currently pegged at 39 cents.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.