Vale Increases Sales but Misses Estimates on Earnings

Seth Jayson, The Motley Fool
Updated

Vale (NYS: VALE) reported earnings on Feb. 16. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Vale beat expectations on revenues and missed expectations on earnings per share.

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

Margins shrank across the board.

Revenue details
Vale tallied revenue of $15.71 billion. The nine analysts polled by S&P Capital IQ hoped for a top line of $14.43 billion on the same basis. GAAP reported sales were 63% higher than the prior-year quarter's $11.13 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
Non-GAAP EPS came in at $0.93. The 12 earnings estimates compiled by S&P Capital IQ averaged $1.01 per share on the same basis. GAAP EPS of $1.37 for Q4 were 40% higher than the prior-year quarter's $0.98 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 57.2%, 120 basis points worse than the prior-year quarter. Operating margin was 45.0%, 130 basis points worse than the prior-year quarter. Net margin was 38.9%, 760 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $13.65 billion. On the bottom line, the average EPS estimate is $0.82.

Next year's average estimate for revenue is $58.13 billion. The average EPS estimate is $3.77.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 6,466 members out of 6,622 rating the stock outperform, and 156 members rating it underperform. Among 1,465 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,431 give Vale a green thumbs-up, and 34 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 $34.30.

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At the time thisarticle 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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