Lots of you have rightfully been looking south lately, in the general direction of Brazil, watching Petrobras
But Brazil is also home to a mining company that you should track carefully. If mining giant Vale
The past quarter was a tough one for Vale, as it was for commodities-based companies everywhere, but it was hardly a disaster. While its net earnings slid 33% from the first quarter last year to $1.4 billion, you'll still find them in the plus column. Further, quarterly EPS was $0.26, identical to the prior quarter. So the slide may be slowing.
If you're in the mood for a solid description of the world's current economic difficulties, latch onto the company's earnings release. Included is a discussion of China's economic growth and its impact on Vale's iron ore sales, which account for nearly 60% of the company's total revenues. Vale ranks among the top three in this area, along with behemoths BHP Billiton
The company's earnings release made clear the plight of other metals, such as nickel and aluminum, the latter of which has calmed down, as shown by the results from Alcoa
But there were noteworthy -- and relatively positive -- comments during the company's earnings call. From Vale CFO Fabio Barbosa: "We are not quietly waiting for the better times. We are working very hard to slash our cost structure in order to provide the company with the financial strength it deserves." And CEO Roger Agnelli noted that “[the market] is not recovering yet, but is not getting worse." And, also, "the first quarter I think was the bottom in terms of all kinds of problems." If we have indeed reached a bottom, as these comments indicate, does this signal a potential buying opportunity?
So gawk all you want at Petrobras. It's a terrific company that has stumbled -- or swum -- into the biggest oil finds in decades. But while you're looking toward Brazil, be sure to cast your eyes on Vale. Both Brazilian companies are worth your Foolish attention.
For related Foolishness:
Fool contributor David Lee Smith doesn't have financial interests in any of the companies mentioned above. He does, however, welcome your questions and comments. The Fool has a molten disclosure policy.