Vale Profit Almost Quadruple than Estimates

Vale SA, the world’s largest iron- ore producer, said its fourth-quarter profit almost quadrupled, beating analysts’ estimates, because of surging prices for the raw material used to make steel.

Net income climbed to $5.92 billion, or $1.12 a share, from $1.52 billion, or 28 cents, a year earlier, Rio de Janeiro-based Vale said late yesterday in a statement. Vale was expected to post per-share profit of $1.01 on an adjusted basis, according to the average estimate of 11 analysts in a Bloomberg survey.

Vale plans to invest $24 billion this year, more than rivals BHP Billiton Ltd. and Rio Tinto Group, to expand its output capacity to 522 million metric tons of iron ore by 2015, enough to supply about 10 months of China’s imports. Iron-ore prices rose to the highest since at least 2008 last week on stronger Chinese demand and speculation that India, the world’s third-largest exporter, will further curtail supplies.

“The performance of iron-ore and pellet prices over the year shows the imbalance between global demand and supply,” Vale said in the statement. The imbalance “was the main reason for the significant revenue increase.”

Revenue more than doubled to $15.2 billion from $6.54 billion in the fourth quarter. Vale sold its iron ore for an average of about $121 a ton, up from about $56 a year earlier.