) is set to report first quarter 2013 results on Apr 24. Last
quarter it posted a 26.00% negative surprise. Let's see how
things are shaping up for this announcement.
Growth Factors this Past Quarter
Vale recently reported its production report for the first
quarter 2013. Iron ore production saw a year-over-year decline of
3.5% due to the impediments pertaining to license delays and
other operational issues. Also, pellet production declined in the
quarter. However, coal production reached its peak in the
quarter, led by increased production of metallurgical coal.
Vale is facing continuous difficulties in maintaining its
margins as the prices of most of its commodities have taken a
downward trend. However, the company's continued efforts to focus
on its core business through the divestiture of its
non-profitable and low margin assets seem encouraging.
Our proven model does not conclusively show that Vale is
likely to beat earnings this quarter. This is because a stock
needs to have both a positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
Negative Zacks ESP:
This is because the Most Accurate Estimate stands at 31 cents
while the Zacks Consensus Estimate is higher at 43 cents. That
is, there is a difference of -27.91%.
Zacks Rank #3 (Hold).
Vale's Zacks Rank #3 (Hold) lowers the predictive power of ESP
because the Zacks Rank #3 when combined with a negative ESP makes
a surprise prediction difficult. We caution against stocks with
Zacks #4 and #5 Ranks (Sell rated stocks) going into the earnings
announcement, especially when the company is seeing a negative
estimate revision momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this quarter:
Thompson Creek Metals Company
), Earnings ESP of 200.0% and a Zacks Rank #3 (Hold)
Peabody Energy Corp.
), Earnings ESP of 100.0% and a Zacks Rank #3 (Hold)
CONSOL Energy Inc.
), Earnings ESP of 20.0% and a Zacks Rank #3 (Hold).
PEABODY ENERGY (BTU): Free Stock Analysis
CONSOL ENERGY (CNX): Free Stock Analysis
THOMPSON CREEK (TC): Free Stock Analysis
VALE SA (VALE): Free Stock Analysis Report
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