Vale S.A. (VALE, Financial) announced 8.5% sequential and 26.5% year-over-year decline in third quarter 2014 net operating revenue to $9.2 billion. It also represented a decline of $830 million compared to second quarter of 2014. Revenue came lesser than the Zacks Consensus Estimate of $10.6 billion.
Earnings analysis
Vale reported 200.6% decline in third quarter 2014 net income (loss) to $(1,437) million from $1,428 million in second quarter of 2014 and a decline of approximately 141% from net income (loss) of $3,502 million reported during third quarter of 2013.
A look at the end markets
The inventory for Vale enhanced during the quarter primarily due to the blockage in the Carajas railway and owing to the commercial strategy. The cash cost increased to $24.07 per ton primarily due to the recurrent effect, without recurrent effects of advanced maintenance and logistic costs to prepare for the rise in production volumes expected to initiate in the forthcoming quarters and for the processing of the left invoices linked to the launch of an innovative system during the quarter.
Iron ore cash cost is estimated to decline much more with the expansion in production, increase in diluted fixed cost and the company
