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VALE (VALE) Q3 Earnings Beat Estimates, Revenues Up Y/Y
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Vale S.A. (VALE - Free Report) reported third-quarter 2023 adjusted earnings per share of 66 cents, which beat the Zacks Consensus Estimate of earnings of 61 cents per share.
The bottom-line figure was down 33% from earnings per share of 98 cents reported in the year-ago quarter. Despite higher revenues, higher costs and expenses led to a decline in Vale’s earnings.
Revenues
Net operating revenues rose 7% year over year to $10.6 billion. The top line surpassed the Zacks Consensus Estimate of $10.5 billion.
Net operating revenues at the Iron Solutions segment increased 13% year over year to $8.9 billion due to higher iron ore realized prices and sales volumes.
The Energy Transition Metals segment’s net operating revenues declined 16% to around $1.72 billion. Nickel revenues declined 18.5% year over year in the quarter to $1 billion due to lower average prices and lower volumes sold. Copper revenues were up 38% to $0.6 billion aided by improved sales volumes and copper prices.
Operating Performance
In the third quarter of 2023, the cost of goods sold totaled $6.3 billion, flat compared with the year-ago quarter. The gross profit increased 19% year over year to $4.3 billion. The gross margin was 40.6% compared with 36.5% in the prior-year quarter.
Selling, general and administrative expenditures moved up 29% year over year to $150 million. Research and development expenses climbed 11% to $188 million from the year-ago quarter.
Adjusted operating income was $3.4 billion in the reported quarter. The figure marked a 17.5% improvement from the prior-year quarter. Adjusted EBITDA was $4.2 billion in the reported quarter compared with $3.7 billion in the prior-year quarter.
Pro-forma adjusted EBITDA (excluding expenses related to Brumadinho) improved 12% year over year to $4.5 billion. The downfall was mainly attributed to lower realized prices of iron ore fines and pellets, lower sales of iron ore fines and inflated costs.
The Iron Solutions segment’s adjusted EBITDA was $4.4 billion, reflecting 18% growth from the third quarter of 2022. The improvement was attributed to higher iron ore realized prices and sales volumes.
The Energy Transition Metals segment’s EBITDA moved up 4% to $379 million from $364 million in the prior-year quarter. Copper operations witnessed a 73.5% year-over-year improvement in adjusted EBITDA, which helped offset the 52% plunge seen in nickel operations.
Balance Sheet & Cash Flow
Vale exited the third quarter of 2023 with cash and cash equivalents of around $4 billion compared with $5.2 billion at the end of last year’s comparable quarter. Cash flow from operations was $2.9 billion in the third quarter of 2023 compared with $3.4 billion in the prior-year quarter.
Gross debt at the end of the quarter under review was $12.6 billion compared with $10.7 billion at the end of the third quarter of 2022. Vale paid out $1.8 billion as dividends in the quarter.
Vale’s Board of Directors has approved the distribution of $2 billion in dividends and interest on capital, which is scheduled to be paid on Dec 1, 2023. The Board has also approved a fourth share buyback program to repurchase up to 150 million shares over the next 18 months.
Price Performance
In the past year, shares of Vale have gained 2.1%, in line with the industry.
The Zacks Consensus Estimate for ANDE's current-year earnings has been revised 3.3% upward in the past 90 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. ANDE shares have rallied around 40.7% in a year.
In the past 60 days, the Zacks Consensus Estimate for WestRock’s current fiscal year has been revised upward by 5.2%. WRK beat the Zacks Consensus Estimate in three of the last four quarters while missing in one quarter, with the average earnings surprise being 30.7%. The company’s shares have rallied 4% in the past year.
The consensus estimate for Koppers’ current fiscal year earnings is pegged at $4.45 per share, indicating year-over-year growth of 7.5%. KOP beat the Zacks Consensus Estimate in all four quarters, with the average earnings surprise being 21.7%. The company’s shares have surged 45.6% in the past year.
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VALE (VALE) Q3 Earnings Beat Estimates, Revenues Up Y/Y
Vale S.A. (VALE - Free Report) reported third-quarter 2023 adjusted earnings per share of 66 cents, which beat the Zacks Consensus Estimate of earnings of 61 cents per share.
The bottom-line figure was down 33% from earnings per share of 98 cents reported in the year-ago quarter. Despite higher revenues, higher costs and expenses led to a decline in Vale’s earnings.
Revenues
Net operating revenues rose 7% year over year to $10.6 billion. The top line surpassed the Zacks Consensus Estimate of $10.5 billion.
VALE S.A. Price, Consensus and EPS Surprise
VALE S.A. price-consensus-eps-surprise-chart | VALE S.A. Quote
Net operating revenues at the Iron Solutions segment increased 13% year over year to $8.9 billion due to higher iron ore realized prices and sales volumes.
The Energy Transition Metals segment’s net operating revenues declined 16% to around $1.72 billion. Nickel revenues declined 18.5% year over year in the quarter to $1 billion due to lower average prices and lower volumes sold. Copper revenues were up 38% to $0.6 billion aided by improved sales volumes and copper prices.
Operating Performance
In the third quarter of 2023, the cost of goods sold totaled $6.3 billion, flat compared with the year-ago quarter. The gross profit increased 19% year over year to $4.3 billion. The gross margin was 40.6% compared with 36.5% in the prior-year quarter.
Selling, general and administrative expenditures moved up 29% year over year to $150 million. Research and development expenses climbed 11% to $188 million from the year-ago quarter.
Adjusted operating income was $3.4 billion in the reported quarter. The figure marked a 17.5% improvement from the prior-year quarter. Adjusted EBITDA was $4.2 billion in the reported quarter compared with $3.7 billion in the prior-year quarter.
Pro-forma adjusted EBITDA (excluding expenses related to Brumadinho) improved 12% year over year to $4.5 billion. The downfall was mainly attributed to lower realized prices of iron ore fines and pellets, lower sales of iron ore fines and inflated costs.
The Iron Solutions segment’s adjusted EBITDA was $4.4 billion, reflecting 18% growth from the third quarter of 2022. The improvement was attributed to higher iron ore realized prices and sales volumes.
The Energy Transition Metals segment’s EBITDA moved up 4% to $379 million from $364 million in the prior-year quarter. Copper operations witnessed a 73.5% year-over-year improvement in adjusted EBITDA, which helped offset the 52% plunge seen in nickel operations.
Balance Sheet & Cash Flow
Vale exited the third quarter of 2023 with cash and cash equivalents of around $4 billion compared with $5.2 billion at the end of last year’s comparable quarter. Cash flow from operations was $2.9 billion in the third quarter of 2023 compared with $3.4 billion in the prior-year quarter.
Gross debt at the end of the quarter under review was $12.6 billion compared with $10.7 billion at the end of the third quarter of 2022. Vale paid out $1.8 billion as dividends in the quarter.
Vale’s Board of Directors has approved the distribution of $2 billion in dividends and interest on capital, which is scheduled to be paid on Dec 1, 2023. The Board has also approved a fourth share buyback program to repurchase up to 150 million shares over the next 18 months.
Price Performance
In the past year, shares of Vale have gained 2.1%, in line with the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Stocks to Consider
Vale currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Basic Materials space are The Andersons Inc. (ANDE - Free Report) , currently sporting a Zacks Rank #1 (Strong Buy), and WestRock Company and Koppers Holdings Inc. (KOP - Free Report) , each carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ANDE's current-year earnings has been revised 3.3% upward in the past 90 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. ANDE shares have rallied around 40.7% in a year.
In the past 60 days, the Zacks Consensus Estimate for WestRock’s current fiscal year has been revised upward by 5.2%. WRK beat the Zacks Consensus Estimate in three of the last four quarters while missing in one quarter, with the average earnings surprise being 30.7%. The company’s shares have rallied 4% in the past year.
The consensus estimate for Koppers’ current fiscal year earnings is pegged at $4.45 per share, indicating year-over-year growth of 7.5%. KOP beat the Zacks Consensus Estimate in all four quarters, with the average earnings surprise being 21.7%. The company’s shares have surged 45.6% in the past year.