Vale's Q1 profit slides but tops estimates; launches big new buyback program

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Vale (NYSE:VALE) +5.4% post-market Wednesday after reporting that Q1 net profit fell nearly 20% from a year ago to $4.45B but it was enough to beat the $4.24B analyst consensus estimate.

Q1 adjusted EBITDA from continuing operations dropped to $6.37B from $8.5B in the year-earlier quarter, and net operating revenues fell 14% Y/Y to $10.8B, as sales of iron ore fines and pellets came in lower because of heavy rainfall in Brazil's Minas Gerais state.

However, Vale (VALE) approved its biggest-ever stock buyback program of up to 500M common shares, ~10% of its outstanding shares, over the next 18 months.

The move is "a clear sign Vale believes its shares are trading at quite cheap levels," Alpha Key Capital Management CEO Christian Keleti said.

Vale (VALE) disclosed Q1 production and sales volumes earlier this month that declined due to weather-related problems.

Vale's (VALE) price return has gained 17% YTD while declining 17% during the past year.