Will Vale report earnings miss in Q2 amid lower output?

Will Vale report earnings miss in Q2 amid lower output?


Vale (NYSE:VALE) is scheduled to announce Q2 results on Thursday, Jul. 28, after market close.

Consensus EPS estimate is $0.80 and consensus revenue estimate is $11.61B (-30.4% Y/Y).

Over the last 2 years, VALE has beaten EPS estimates 50% of the time and revenue estimates 63% of the time.

Over the last 3 months, EPS estimates have seen 1 downward revision and revenue estimates have seen 1 downward revision.

Investors will look out for guidance as iron and copper prices have been hit by macro uncertainty and weak demand in China.

Q2 production:

  • VALE’s Q2 iron ore production missed estimates and it lowered its iron ore and copper output guidance for the year.
  • The lackluster results risk delaying a potential sale/spinoff of VALE’s copper and nickel unit that could be worth $40B, Bloomberg reported.
  • Banco Bradesco BBI said the process of stabilizing VALE’s base metals operations remains rocky amid operational setbacks and extended maintenance.
  • Banco BTG Pactual said VALE’s discount to Australian mining peers may expand, given “lower confidence on operational stability/execution”.

Q1 recap:

  • VALE stock rose after the miner reported Q1 profit that topped estimates.
  • The firm approved its biggest-ever stock buyback program, which Alpha Key Capital Management said is a clear sign VALE believes its shares are trading at cheap levels.

Recent news:

  • Wolfe Research remains cautious on VALE, citing the likelihood of sequentially higher costs.
  • VALE and BHP (BHP) said they are not interested in selling their Samarco Mineracao JV, according to Reuters, after reports that Companhia Siderurgica Nacional (SID) was drafting an offer.
  • VALE launched a venture capital initiative to invest $100M in sustainable mining startups, Bloomberg reported.
  • VALE inked a long-term contract to supply Tesla (TSLA) with nickel; details were not provided.
  • The SEC said it was suing VALE over how it misled investors regarding mining safety practices before a 2019 tailings dam collapse that killed 270 people, WSJ reported.

SA contributor Bram de Haas in a bullish analysis said VALE has become quite attractive after a recent selloff.

Shares of VALE declined ~4% YTD.

Quoted from Various Sources

Published for: Ipodifier