Vale to Report Q3 Earnings: Here's What You Should Know

Core Viewpoint - Vale S.A. is anticipated to report declines in both revenue and earnings for the third quarter of 2024, with significant year-over-year decreases expected in key financial metrics [1][2]. Financial Performance Estimates - The Zacks Consensus Estimate for Vale's sales is projected at $10.09 billion, reflecting a 5% decrease from the same quarter last year [2]. - The consensus estimate for earnings has decreased by 9.3% over the past 60 days to 49 cents per share, indicating a 25.8% decline year-over-year [2]. Production and Sales Insights - Iron ore production reached approximately 91 million tons, a 5.5% increase year-over-year, marking the highest output since Q4 2018, driven by improved performance at key sites [3]. - Pellet production rose by 13% year-over-year to 10.4 million tons, while iron ore fines sales slightly decreased by 0.5% to 69.3 million tons [4]. Pricing Trends - The average realized price for iron ore fines was $90.60 per ton, down 13.8% year-over-year, while the price for iron ore pellets decreased by 8% to $148.2 per ton [4]. - Nickel sales were recorded at 40.7 thousand tons, a 3.8% increase from the previous year, but below the consensus estimate of 45 thousand tons. The average realized nickel price fell by 20% to $17,012 per ton [5]. - Copper sales increased by 1.9% to 75.2 thousand tons, but also missed the consensus estimate of 92.6 thousand tons. The average realized copper price rose by 16.6% to $9,016 per ton [6]. Revenue Breakdown - The Iron Solutions segment, which constitutes approximately 93% of Vale's revenues, is expected to generate $6.4 billion, indicating a 13% decline year-over-year [5]. - The consensus estimate for pellet revenues is $1.18 billion, reflecting a 15% decline from the previous year [5]. - Nickel revenues are estimated at $870.7 million, a 15% year-over-year decline due to lower prices [5]. Cost and Margin Considerations - The company has been facing increased input costs, particularly for diesel and freight, which are likely to impact margins. However, cost-control measures may mitigate some of these effects [7]. Earnings Prediction Model - The current model does not predict an earnings beat for Vale, with an Earnings ESP of -18.84% and a Zacks Rank of 3 (Hold) [8]. Stock Performance - Over the past year, Vale's shares have decreased by 16.7%, aligning with industry trends [9].