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The Zacks Consensus Estimate for Vale’s fourth-quarter total sales is pegged at $12.98 billion, indicating a decline of 12% from the year-ago quarter. The consensus mark for earnings has moved north by 15% over the past 30 days to 85 cents, suggesting a decrease of 22% from the prior-year quarter.
Q3 Results
Vale’s third-quarter earnings and revenues were higher than the year-ago quarter driven by strong performance of the Ferrous Minerals business, on account of higher volumes and iron ore prices. While the bottom line beat the Zacks Consensus Estimate, the top line missed the same. The company has beat earnings estimates in each of the trailing four quarters, the average surprise being 11.96%.
Vale recently provided fourth-quarter-2021 production update, which offers a sneak peek as to how the company is likely to fare in the to-be-reported quarter. Iron ore production for the quarter was 82.5 million tons (Mt), down 2.4% year over year primarily due to higher rainfall that restricted mining in deeper pits in Serra Norte, which is located in Vale's northern system.
The company’s pellet production was up 27.5% year over year to 9 Mt in the quarter. Sales volume of iron ore fines and pellets was up 2% to 93.5 Mt in the quarter under review.
Iron ore prices lost steam during the course of the fourth quarter of 2021 due to the intensified curbs on steel production in China to lower carbon emissions. Signs of a slowdown across China’s property sector might have acted as a drag on the main steel-making ingredient. Prices recovered in the later part of the quarter as China’s property sector showed signs of improvement. Also, as some companies completed their crude steel output reduction targets, it fueled expectations of pickup in demand in China, lending some support to iron ore prices. Still, iron ore prices remained below the highs witnessed in 2020. Iron accounts for around 80% of Vale’s revenues. Thus, lower iron prices and production are likely to get reflected in Vale’s fourth-quarter top line.
With regard to base metals, which collectively contribute around 16% to the company’s revenues, Nickel production reached 48 kt in the fourth quarter of 2021, which marked a 5.5% decline from last year. Nickel sales plunged 24% year over year to 44.7 kt. Nickel sales were below production due to inventory rebuild after the drawdown in the third quarter of 2021 following the labor disruption in Sudbury and extended maintenance in Onça Puma. Copper production was 77.5 kt in the quarter, down 17% year over year. Copper sales was in line with production.
Copper and nickel prices were up year over year in the October-December period. Higher year-over-year prices might have somewhat offset the impact of lower sale for these metals.
Coal production was 2.8 Mt in the fourth quarter, up 129% from the prior-year quarter. Coal sales in the quarter totaled around 2.65 kt, highlighting growth of 73% year over year. Higher coal sales and prices are also likely to have provided a boost to the fourth-quarter performance.
On the flipside, Vale has been facing higher input costs, particularly of diesel and freight costs, which might have weighed on its margins in the quarter to be reported. Nevertheless, the company’s cost control efforts may have negated some of this impact.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Vale this season. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Vale is +11.77%.
In a year’s time, shares of Vale have fallen 7.0%, compared with the industry’s decline of 6.9%.
Other Stocks Poised to Beat Estimates
Here are some other companies worth considering as our model shows that these too have the right combination of elements to beat on earnings this season:
MP Materials (MP - Free Report) currently has an Earnings ESP of +21.88% and a Zacks Rank of 1. MP is scheduled to report fourth-quarter 2021 results on Feb 24, after the closing bell. The Zacks Consensus Estimate for the company’s quarterly revenues is pegged at $89.7 billion, indicating a surge of 113% from the prior-year quarter.
The Zacks Consensus Estimate for MP Materials’ bottom line has remained stable over the past 30 days and is pegged at 18 cents per share. The consensus mark for earnings suggests an increase of 16.7% from the year-ago reported figure. MP has a trailing four-quarter earnings surprise of 33.6%, on average.
Newmont Mining (NEM - Free Report) currently has an Earnings ESP of +3.59% and a Zacks Rank #3. NEM is scheduled to report fourth-quarter fiscal 2021 numbers on Feb 24, before the market opens. The Zacks Consensus Estimate for the company’s quarterly revenues is pegged at $3.34 billion, which indicates an decline of 1.2% from the prior-year quarter.
The Zacks Consensus Estimate for earnings per share for the fourth quarter stands at 76 cents, which suggests a fall of 28% from the year-ago quarter. The estimates have moved up 1% over the past 30 days. NEM has a trailing four-quarter earnings surprise of 0.99%, on average.
National Steel (SID - Free Report) currently has an Earnings ESP of +3.57% and a Zacks Rank of 3. SID is scheduled to report fourth-quarter fiscal 2021 numbers on Mar 9. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.11 billion, which suggests growth of 16% from the prior-year reported figure.
The Zacks Consensus Estimate for National Steel’s quarterly earnings per share of 28 cents suggests a 46% plunge from the year-ago period’s reported number. The estimate has been revised downward by 15% over the past 30 days. SID has a trailing four-quarter negative earnings surprise of 10.69%, on average.
Image: Bigstock
Vale (VALE) to Report Q4 Earnings: What's in the Cards?
Vale S.A (VALE - Free Report) is scheduled to report fourth-quarter 2021 results on Feb 24, after the closing bell.
Q4 Estimates
The Zacks Consensus Estimate for Vale’s fourth-quarter total sales is pegged at $12.98 billion, indicating a decline of 12% from the year-ago quarter. The consensus mark for earnings has moved north by 15% over the past 30 days to 85 cents, suggesting a decrease of 22% from the prior-year quarter.
Q3 Results
Vale’s third-quarter earnings and revenues were higher than the year-ago quarter driven by strong performance of the Ferrous Minerals business, on account of higher volumes and iron ore prices. While the bottom line beat the Zacks Consensus Estimate, the top line missed the same. The company has beat earnings estimates in each of the trailing four quarters, the average surprise being 11.96%.
VALE S.A. Price and EPS Surprise
VALE S.A. price-eps-surprise | VALE S.A. Quote
Factors to Note
Vale recently provided fourth-quarter-2021 production update, which offers a sneak peek as to how the company is likely to fare in the to-be-reported quarter. Iron ore production for the quarter was 82.5 million tons (Mt), down 2.4% year over year primarily due to higher rainfall that restricted mining in deeper pits in Serra Norte, which is located in Vale's northern system.
The company’s pellet production was up 27.5% year over year to 9 Mt in the quarter. Sales volume of iron ore fines and pellets was up 2% to 93.5 Mt in the quarter under review.
Iron ore prices lost steam during the course of the fourth quarter of 2021 due to the intensified curbs on steel production in China to lower carbon emissions. Signs of a slowdown across China’s property sector might have acted as a drag on the main steel-making ingredient. Prices recovered in the later part of the quarter as China’s property sector showed signs of improvement. Also, as some companies completed their crude steel output reduction targets, it fueled expectations of pickup in demand in China, lending some support to iron ore prices. Still, iron ore prices remained below the highs witnessed in 2020. Iron accounts for around 80% of Vale’s revenues. Thus, lower iron prices and production are likely to get reflected in Vale’s fourth-quarter top line.
With regard to base metals, which collectively contribute around 16% to the company’s revenues, Nickel production reached 48 kt in the fourth quarter of 2021, which marked a 5.5% decline from last year. Nickel sales plunged 24% year over year to 44.7 kt. Nickel sales were below production due to inventory rebuild after the drawdown in the third quarter of 2021 following the labor disruption in Sudbury and extended maintenance in Onça Puma. Copper production was 77.5 kt in the quarter, down 17% year over year. Copper sales was in line with production.
Copper and nickel prices were up year over year in the October-December period. Higher year-over-year prices might have somewhat offset the impact of lower sale for these metals.
Coal production was 2.8 Mt in the fourth quarter, up 129% from the prior-year quarter. Coal sales in the quarter totaled around 2.65 kt, highlighting growth of 73% year over year. Higher coal sales and prices are also likely to have provided a boost to the fourth-quarter performance.
On the flipside, Vale has been facing higher input costs, particularly of diesel and freight costs, which might have weighed on its margins in the quarter to be reported. Nevertheless, the company’s cost control efforts may have negated some of this impact.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Vale this season. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Vale is +11.77%.
Zacks Rank: The company currently has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Price Performance
Image Source: Zacks Investment Research
In a year’s time, shares of Vale have fallen 7.0%, compared with the industry’s decline of 6.9%.
Other Stocks Poised to Beat Estimates
Here are some other companies worth considering as our model shows that these too have the right combination of elements to beat on earnings this season:
MP Materials (MP - Free Report) currently has an Earnings ESP of +21.88% and a Zacks Rank of 1. MP is scheduled to report fourth-quarter 2021 results on Feb 24, after the closing bell. The Zacks Consensus Estimate for the company’s quarterly revenues is pegged at $89.7 billion, indicating a surge of 113% from the prior-year quarter.
The Zacks Consensus Estimate for MP Materials’ bottom line has remained stable over the past 30 days and is pegged at 18 cents per share. The consensus mark for earnings suggests an increase of 16.7% from the year-ago reported figure. MP has a trailing four-quarter earnings surprise of 33.6%, on average.
Newmont Mining (NEM - Free Report) currently has an Earnings ESP of +3.59% and a Zacks Rank #3. NEM is scheduled to report fourth-quarter fiscal 2021 numbers on Feb 24, before the market opens. The Zacks Consensus Estimate for the company’s quarterly revenues is pegged at $3.34 billion, which indicates an decline of 1.2% from the prior-year quarter.
The Zacks Consensus Estimate for earnings per share for the fourth quarter stands at 76 cents, which suggests a fall of 28% from the year-ago quarter. The estimates have moved up 1% over the past 30 days. NEM has a trailing four-quarter earnings surprise of 0.99%, on average.
National Steel (SID - Free Report) currently has an Earnings ESP of +3.57% and a Zacks Rank of 3. SID is scheduled to report fourth-quarter fiscal 2021 numbers on Mar 9. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.11 billion, which suggests growth of 16% from the prior-year reported figure.
The Zacks Consensus Estimate for National Steel’s quarterly earnings per share of 28 cents suggests a 46% plunge from the year-ago period’s reported number. The estimate has been revised downward by 15% over the past 30 days. SID has a trailing four-quarter negative earnings surprise of 10.69%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.