We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
VALE Q4 Earnings Fall Short of Estimates, Revenues Increase Y/Y
Read MoreHide Full Article
Vale S.A. (VALE - Free Report) reported fourth-quarter 2023 adjusted earnings per share of 56 cents, which missed the Zacks Consensus Estimate of $1.04.
The bottom-line figure was down 32% from earnings per share of 82 cents reported in the year-ago quarter. Despite higher revenues, an increase in provision related to Samarco’s dam failure led to a decline in Vale’s earnings.
Revenues
Net operating revenues rose 9% year over year to around $13.05 billion. The top line surpassed the Zacks Consensus Estimate of $12.95 billion.
Net operating revenues at the Iron Solutions segment increased 18% year over year to $11 billion due to higher iron ore realized prices, which was somewhat offset by lower sales volumes.
The Energy Transition Metals segment’s net operating revenues declined 22% year over year to $1.98 billion. Nickel revenues plunged 38% year over year to $152 million due to lower average prices and lower volumes sold. Copper revenues were up 28.5% to $767 million on higher sales volumes.
Operating Performance
In the fourth quarter of 2023, the cost of goods sold totaled $6.9 billion, down 3.7% compared with the year-ago quarter. The gross profit increased 29% year over year to $6.2 billion. The gross margin was 47.2% compared with 40.1% in the year-ago quarter.
Selling, general and administrative expenditures moved down 1% year over year to $146 million. Research and development expenses climbed 6% to $231 million from the year-ago quarter.
Adjusted operating income was $5.5 billion in the reported quarter. The figure marked a 47% improvement from the year-ago quarter. Adjusted EBITDA was $6.3 billion in the reported quarter compared with $4.6 billion in the year-ago quarter.
Pro-forma adjusted EBITDA (excluding expenses related to Brumadinho) improved 35% year over year to $6.7 billion aided by improved copper sales volumes and higher iron ore prices. The Iron Solutions segment’s adjusted EBITDA was $6.4 billion, reflecting 36% growth from the fourth quarter of 2022. The improvement was attributed to higher iron ore realized prices, somewhat offset by lower sales volumes.
The Energy Transition Metals segment’s EBITDA slumped 32.5% to $523 million from $775 million in the year-ago quarter. Copper operations witnessed a 127% year-over-year improvement in adjusted EBITDA to $375 million attributed to higher sales volumes. Adjusted EBITDA for nickel slumped 74% year over year to $152 million due to lower average prices and lower volumes sold.
Balance Sheet & Cash Flows
Vale exited 2023 with cash and cash equivalents of around $3.6 billion compared with $4.7 billion at the end of 2022. Cash flow from operations was $13.2 billion in 2023 compared with $11.4 billion in 2022.
Gross debt at the end of 2023 was $12.5 billion compared with $11.2 billion at the end of 2022. Vale paid out $2 billion as dividends and interest on capital in the fourth quarter. The company will pay $2.4 billion in dividends in March 2024.
The company has allocated $44 million for the fourth share buyback program. As of date, Vale has repurchased 22.6 million shares, having completed 15% of the program.
Other Updates
Vale recently entered into an agreement with Anglo American (NGLOY - Free Report) to acquire a 15% ownership interest and establish a partnership encompassing the Minas-Rio iron ore complex and Vale’s Serra da Serpentina resources in Brazil.
Anglo American will continue to control, manage and operate Minas-Rio, including any future expansions. Following the completion of the transaction, Vale will receive its share of production from Minas-Rio. Minas-Rio has an estimated high-grade pellet feed annual production capacity of 26.5 Mt.
Vale also signed a Memorandum of Understanding with Hydnum Steel to jointly evaluate the feasibility of building an iron ore briquette plant in Hydnum Steel's flagship project for green steel in Puertollano, Spain. The plant will begin producing 1.5 Mtpy of rolled steel in 2026. It is projected to reach 2.6 Mtpy capacity starting from 2030.
Price Performance
In the past year, shares of Vale have lost 17.3%, compared with the industry’s decline of 17.8%.
The Zacks Consensus Estimate for Carpenter Technology’s 2024 earnings is pegged at $3.96 per share. The consensus estimate for 2024 earnings has moved 11% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 14.3%. CRS shares have gained 36% in a year.
The Zacks Consensus Estimate for Ecolab’s 2024 earnings is pegged at $6.39 per share, indicating an increase of 22.7% from the prior year’s reported number. It has an average trailing four-quarter earnings surprise of 1.7%. ECL shares have gained 38% in a year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
VALE Q4 Earnings Fall Short of Estimates, Revenues Increase Y/Y
Vale S.A. (VALE - Free Report) reported fourth-quarter 2023 adjusted earnings per share of 56 cents, which missed the Zacks Consensus Estimate of $1.04.
The bottom-line figure was down 32% from earnings per share of 82 cents reported in the year-ago quarter. Despite higher revenues, an increase in provision related to Samarco’s dam failure led to a decline in Vale’s earnings.
Revenues
Net operating revenues rose 9% year over year to around $13.05 billion. The top line surpassed the Zacks Consensus Estimate of $12.95 billion.
Net operating revenues at the Iron Solutions segment increased 18% year over year to $11 billion due to higher iron ore realized prices, which was somewhat offset by lower sales volumes.
VALE S.A. Price, Consensus and EPS Surprise
VALE S.A. price-consensus-eps-surprise-chart | VALE S.A. Quote
The Energy Transition Metals segment’s net operating revenues declined 22% year over year to $1.98 billion. Nickel revenues plunged 38% year over year to $152 million due to lower average prices and lower volumes sold. Copper revenues were up 28.5% to $767 million on higher sales volumes.
Operating Performance
In the fourth quarter of 2023, the cost of goods sold totaled $6.9 billion, down 3.7% compared with the year-ago quarter. The gross profit increased 29% year over year to $6.2 billion. The gross margin was 47.2% compared with 40.1% in the year-ago quarter.
Selling, general and administrative expenditures moved down 1% year over year to $146 million. Research and development expenses climbed 6% to $231 million from the year-ago quarter.
Adjusted operating income was $5.5 billion in the reported quarter. The figure marked a 47% improvement from the year-ago quarter. Adjusted EBITDA was $6.3 billion in the reported quarter compared with $4.6 billion in the year-ago quarter.
Pro-forma adjusted EBITDA (excluding expenses related to Brumadinho) improved 35% year over year to $6.7 billion aided by improved copper sales volumes and higher iron ore prices.
The Iron Solutions segment’s adjusted EBITDA was $6.4 billion, reflecting 36% growth from the fourth quarter of 2022. The improvement was attributed to higher iron ore realized prices, somewhat offset by lower sales volumes.
The Energy Transition Metals segment’s EBITDA slumped 32.5% to $523 million from $775 million in the year-ago quarter. Copper operations witnessed a 127% year-over-year improvement in adjusted EBITDA to $375 million attributed to higher sales volumes. Adjusted EBITDA for nickel slumped 74% year over year to $152 million due to lower average prices and lower volumes sold.
Balance Sheet & Cash Flows
Vale exited 2023 with cash and cash equivalents of around $3.6 billion compared with $4.7 billion at the end of 2022. Cash flow from operations was $13.2 billion in 2023 compared with $11.4 billion in 2022.
Gross debt at the end of 2023 was $12.5 billion compared with $11.2 billion at the end of 2022. Vale paid out $2 billion as dividends and interest on capital in the fourth quarter. The company will pay $2.4 billion in dividends in March 2024.
The company has allocated $44 million for the fourth share buyback program. As of date, Vale has repurchased 22.6 million shares, having completed 15% of the program.
Other Updates
Vale recently entered into an agreement with Anglo American (NGLOY - Free Report) to acquire a 15% ownership interest and establish a partnership encompassing the Minas-Rio iron ore complex and Vale’s Serra da Serpentina resources in Brazil.
Anglo American will continue to control, manage and operate Minas-Rio, including any future expansions. Following the completion of the transaction, Vale will receive its share of production from Minas-Rio. Minas-Rio has an estimated high-grade pellet feed annual production capacity of 26.5 Mt.
Vale also signed a Memorandum of Understanding with Hydnum Steel to jointly evaluate the feasibility of building an iron ore briquette plant in Hydnum Steel's flagship project for green steel in Puertollano, Spain. The plant will begin producing 1.5 Mtpy of rolled steel in 2026. It is projected to reach 2.6 Mtpy capacity starting from 2030.
Price Performance
In the past year, shares of Vale have lost 17.3%, compared with the industry’s decline of 17.8%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Vale currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) and Ecolab Inc. (ECL - Free Report) . Each of these companies currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Carpenter Technology’s 2024 earnings is pegged at $3.96 per share. The consensus estimate for 2024 earnings has moved 11% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 14.3%. CRS shares have gained 36% in a year.
The Zacks Consensus Estimate for Ecolab’s 2024 earnings is pegged at $6.39 per share, indicating an increase of 22.7% from the prior year’s reported number. It has an average trailing four-quarter earnings surprise of 1.7%. ECL shares have gained 38% in a year.