Brazilian miner Vale (NYSE: RIO) reported better than expected third quarter earnings with profits skyrocketing to 12.4bn reais (US$5.48bn), 167% higher than 4.65bn reais posted in 3Q07 and 172% stronger than in 2Q08.
Ebitda in the quarter equaled 11.4bn reais, up 41.9% versus 7.99bn reais in 3Q07. Net revenue rose 32% year-on-year to 20.698bn reais in the recent quarter.
"Earnings were very strong," Pedro Galdi, analyst at SLW brokerage, told BNamericas.
Galdi added the results were mostly related to exchange rate effects, increases in production and exports.
The analyst also said another positive factor in the results were gains in financial applications. "The company also earned with share issuance programs."
Brascan analyst Rodrigo Ferraz said: "Vale's numbers in 3Q08 came well above expectations."
"Vale's gross revenues totaled 21.7bn reais, the highest in the company's history, up 33% from 3Q07," said the analyst in a statement.
Antonio Carlos Goes of Senso brokerage said roughly 95% of Vale's earnings are in non-real currencies such as the US dollar.
"Results were very good, they won't disappoint the market," Goes said in an interview. "Higher volumes of sales and prices were the main factors triggering these results."
Goes said the market was not expecting results to be that good because of the fall in commodity prices.
Rio de Janeiro-based Vale is the world's biggest iron ore producer and has interests in several other metals including copper, nickel and aluminum, as well as logistics and power assets.
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