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Vale's (VALE) Q3 Earnings Beat Estimates, Revenues Up Y/Y
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VALE S.A. (VALE - Free Report) reported third-quarter 2018 earnings of 40 cents per share, which remained flat year over year. The bottom line surpassed the Zacks Consensus Estimate of 35 cents, by a margin of around 14%.
Net operating revenues increased 5% year over year to $9,543 million in the quarter. The figure also beat the Zacks Consensus Estimate of $8,967 million by 6%. Of the total net operating revenues, sales of ferrous minerals accounted for 78%, coal contributed 4.5%, base metals comprised 16.6%, and the remaining 1% was sourced miscellaneously.
Geographically, 9.8% of revenues were generated from South America, 61.9% from Asia, 6.2% from North America, 15% from Europe, 4.8% from the Middle East, and 2.3% from Rest of the World.
Cost of goods sold was $5,756 million in the reported quarter, up 6% year over year. Gross margin was 39.7%, down 50 basis points year over year. Selling, general and administrative expenditure rose 5% to $136 million, while research and development expenses dropped 4% to $87 million, on a year-over-year basis.
Balance Sheet and Cash Flow
Vale exited the third quarter with cash and cash equivalents of $6,100 million, higher than the $4,719 million recorded in the year-ago quarter. During the quarter, Vale’s long-term loans and borrowings came in at $15,437 million, down from $23,952 million recorded in the year-ago quarter.
In the Sep-end quarter, the company generated $3,895 million cash from operating activities, as against $2,395 million recorded in the year-ago quarter. Notably, the company's loans and financing repayment totaled $1,169 million in the quarter, down from $2,818 recorded in the prior-year quarter.
Capital spending summed $692 million in the third quarter, as against $863 million recorded in the previous-year quarter.
Consistent with its rigorous capital-allocation strategy, Vale recently approved the investment of $1.1 billion in the Salobo III copper project. The company will receive a bonus of approximately $600-$700 million from Wheaton Precious Metals, after achieving certain production targets. It has also approved a sustaining investment of $428 million in the Gelado project.
Share Price Performance
Shares of the company have underperformed the industry, over the past year. The stock has gained around 40% compared with 47% growth recorded by the industry during the same time period.
CF Industries has a long-term earnings growth rate of 6%. Its shares have rallied around 18%, over the past year.
Methanex has a long-term earnings growth rate of 15%. The company’s shares have gained around 26% in the past year.
KMG Chemicals has a long-term earnings growth rate of 28.5%. The company’s shares have surged around 36% in a year’s time.
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Vale's (VALE) Q3 Earnings Beat Estimates, Revenues Up Y/Y
VALE S.A. (VALE - Free Report) reported third-quarter 2018 earnings of 40 cents per share, which remained flat year over year. The bottom line surpassed the Zacks Consensus Estimate of 35 cents, by a margin of around 14%.
Net operating revenues increased 5% year over year to $9,543 million in the quarter. The figure also beat the Zacks Consensus Estimate of $8,967 million by 6%. Of the total net operating revenues, sales of ferrous minerals accounted for 78%, coal contributed 4.5%, base metals comprised 16.6%, and the remaining 1% was sourced miscellaneously.
Geographically, 9.8% of revenues were generated from South America, 61.9% from Asia, 6.2% from North America, 15% from Europe, 4.8% from the Middle East, and 2.3% from Rest of the World.
VALE S.A. Price, Consensus and EPS Surprise
VALE S.A. Price, Consensus and EPS Surprise | VALE S.A. Quote
Costs & Margins
Cost of goods sold was $5,756 million in the reported quarter, up 6% year over year. Gross margin was 39.7%, down 50 basis points year over year. Selling, general and administrative expenditure rose 5% to $136 million, while research and development expenses dropped 4% to $87 million, on a year-over-year basis.
Balance Sheet and Cash Flow
Vale exited the third quarter with cash and cash equivalents of $6,100 million, higher than the $4,719 million recorded in the year-ago quarter. During the quarter, Vale’s long-term loans and borrowings came in at $15,437 million, down from $23,952 million recorded in the year-ago quarter.
In the Sep-end quarter, the company generated $3,895 million cash from operating activities, as against $2,395 million recorded in the year-ago quarter. Notably, the company's loans and financing repayment totaled $1,169 million in the quarter, down from $2,818 recorded in the prior-year quarter.
Capital spending summed $692 million in the third quarter, as against $863 million recorded in the previous-year quarter.
Consistent with its rigorous capital-allocation strategy, Vale recently approved the investment of $1.1 billion in the Salobo III copper project. The company will receive a bonus of approximately $600-$700 million from Wheaton Precious Metals, after achieving certain production targets. It has also approved a sustaining investment of $428 million in the Gelado project.
Share Price Performance
Shares of the company have underperformed the industry, over the past year. The stock has gained around 40% compared with 47% growth recorded by the industry during the same time period.
Zacks Rank & Other Stocks to Consider
Vale currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the same sector include CF Industries Holdings, Inc. (CF - Free Report) , Methanex Corporation (MEOH - Free Report) and KMG Chemicals, Inc. . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CF Industries has a long-term earnings growth rate of 6%. Its shares have rallied around 18%, over the past year.
Methanex has a long-term earnings growth rate of 15%. The company’s shares have gained around 26% in the past year.
KMG Chemicals has a long-term earnings growth rate of 28.5%. The company’s shares have surged around 36% in a year’s time.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>