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Vale's Q3 2016 Earnings Preview: Cost Rationalization To Boost Earnings

We expect Vale to report an improvement in its Q3 2016 results, driven by the success of the company's cost reduction initiatives. Vale reported a significant reduction in its cash costs and expenses in Q2 ( as shown below) and we expect a similar performance in the third quarter as well, with cost rationalization continuing to be an important focus area for the company. In addition, higher prices of iron ore (which accounts for roughly two-thirds of Vale's revenue) will support the company's earnings, though lower copper and nickel prices will negatively impact profits.

Vale Q3 2016 Pre-Earnings 1

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Vale

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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