How the Wheels Came Off Vale's Bus

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Vale (NYS: VALE) reported earnings on April 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Vale whiffed on revenues and earnings per share.

Compared to the prior-year quarter, revenue contracted significantly and GAAP earnings per share shrank significantly.


Margins shrank across the board.

Revenue details
Vale tallied revenue of $10.43 billion. The nine analysts polled by S&P Capital IQ expected a top line of $12.61 billion on the same basis. GAAP reported sales were 21% lower than the prior-year quarter's $13.54 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.68. The 10 earnings estimates compiled by S&P Capital IQ forecast $0.77 per share. GAAP EPS of $0.71 for Q1 were 46% lower than the prior-year quarter's $1.31 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 48.7%, 940 basis points worse than the prior-year quarter. Operating margin was 35.0%, 1,420 basis points worse than the prior-year quarter. Net margin was 34.3%, 1,700 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $14.07 billion. On the bottom line, the average EPS estimate is $0.82.

Next year's average estimate for revenue is $56.98 billion. The average EPS estimate is $3.47.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 6,469 members out of 6,629 rating the stock outperform, and 160 members rating it underperform. Among 1,269 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,237 give Vale a green thumbs-up, and 32 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Vale is outperform, with an average price target of $32.03.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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