* WHAT: Mining giant Vale reports first-quarter earnings
* WHEN: Data will be out after markets close on Thursday
* Profit more than tripled as revenue outpaced costs
By Guillermo Parra-Bernal and Denise Luna
SAO PAULO/RIO DE JANEIRO, May 4 (Reuters) - Profit at Brazilian mining giant Vale likely more than tripled in the first quarter as revenue from iron ore sales rose faster than expenses, a Reuters survey of analysts showed on Wednesday.
Vale , the world's biggest producer of iron ore, earned $5.75 billion in first-quarter profit, compared with $1.60 billion a year earlier, according to the average estimate of nine analysts. The Rio de Janeiro-based company unveils quarterly results on Thursday after markets close.
Net income surged as iron-ore prices, which account for 60 percent of Vale's revenue, more than doubled, making up for higher energy and wage costs in Brazil. Management trimmed debt-servicing and financial expenses on a year-on-year basis.
The results will be the last under Chief Executive Roger Agnelli, who led the company for 10 years and will be replaced by company veteran Murilo Ferreira later this month. Agnelli is credited with helping shift Vale's focus toward China and growing it into the world's No. 2 mining company.
On a sequential basis, the divestment of some aluminum assets and seasonally-weak iron ore sales volumes hampered results, the poll found. Profit likely slipped from a record $5.92 billion in the fourth quarter of last year.
Quarter-on-quarter numbers are more widely followed by investors than year-on-year comparisons because they allow investors to focus more on efficiency gains or profit per unit of output rather than on bottomline results alone.
While such comparisons largely strip out gains resulting from scale, they don't remove changes that are the result of seasonal factors such as rains, or holidays.
"Vale should post another set of strong results in the first quarter but still below its full potential due to iron ore volumes seasonality," Credit Suisse analyst Ivan Fadel said in a note.
KEY ISSUES
Despite the favorable results, a strengthening currency poses a risk to revenue and costs. For instance, wage costs in Brazil are linked to the real , while Vale's revenue as Brazil's largest exporter is mostly denominated in dollars.
Management will host a conference call to explain the results on May 6. Investors may query officials on strategy changes in the wake of Agnelli's departure, the company's $1.1 billion bid for South African copper and cobalt miner Metorex and the outlook for ore prices, HSBC analyst Jonathan Brandt said in a note.
Vale probably produced 71 million tonnes of iron ore in the first three months of the year, 8.3 percent less compared with the prior quarter, because of heavy rains in Brazil and fewer working days in China, the world's largest buyer of iron ore, as a result of the Chinese New Year.
Revenue more than doubled to $14.54 billion from the year-ago period, while earnings before interest, tax, depreciation and amortization (EBITDA) tripled to $8.73 billion, the poll showed.
EBITDA, a gauge of operational profitability, likely surged to an average 60.2 percent of revenue in the first quarter, compared with 41.7 percent in the year-ago period and 58.3 percent in the last quarter of 2010.
As a result, the company probably piled up more cash in the quarter, opening up room for increased dividends payments and acquisitions, BTG Pactual analyst Edmo Chagas wrote in a report.
Following is a table with first-quarter earnings for Vale. The numbers are all expressed in U.S. dollars unless specified. ===============================================================
1Q2011 1Q2010 PCT CHANGE =============================================================== NET REVENUE $14.54 bln $6.84 bln 113 pct EBITDA $8.73 bln $2.85 bln 206 pct EBITDA MARGIN 60.2 pct 41.7 pct 18.5 pps NET INCOME $5.75 bln $1.60 bln 259 pct ============================================================== ($1=1.58 reais) (Reporting by Guillermo Parra-Bernal; Editing by Muralikumar Anantharaman)