The iron producer reported a -19% drop in net income from the year-ago quarter to $2.52 billion in the first quarter. Analysts surveyed by Thomson Reuters expected net income of $2.59 billion for the quarter. Net revenue fell -11% to $9.5 billion, the lowest of any quarter since Q1 2010.
Prices for iron ore recently fell to a four-year low which contributed to the drop in net income and net revenue. The results were also impacted by Brazil's seasonal rains which limited production. Despite the rains iron ore output increased 9.6% from the year-ago quarter to 71.1 million metric tons.
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TheStreet Ratings team rates VALE SA as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate VALE SA (VALE) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."