Vale , the world's biggest producer of iron ore, posted a record profit in the first quarter as revenue more than doubled and the company booked a one-off gain from the sale of some aluminum assets.

Net income rose more than fourfold to $6.83 billion in the quarter from $1.6 billion a year earlier, according to a regulatory filing on Thursday. The result beat the $5.75 billion average estimate of nine analysts in a Reuters survey.

Net income rose 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. Vale also booked a one-off $1.51 billion gain from the sale of some aluminum assets to Norsk Hydro , a deal that was concluded in the prior quarter.

The results were 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.

The result reflects the execution of our strategy of expanding production through organic growth, by developing top-class assets anchored on an efficient use of capital, management said in the filing.

Sao Paulo-based economic research company Economatica said that Vale's earnings were the biggest first-quarter profit ever reported by a Brazilian company. Vale's is Brazil's largest private sector company and the nation's biggest exporter.

Soaring iron ore, nickel and copper prices sparked a 145 percent jump in net revenue to $13.2 billion from a year earlier. The poll estimated average first-quarter net revenue of $14.5 billion in the period.

Sales of iron ore and pellets reached 68.05 million tonnes in the quarter, down 15.5 percent from the prior quarter because of heavy rains in Brazil and fewer working days in China, the world's largest iron ore buyer, as a result of the New Year holiday.

Iron ore prices rose about 94 percent to $126 a metric ton from the first quarter of 2010. Copper prices soared almost 48 percent to $10,161 a ton, while nickel prices surged 33 percent to $26,851 a ton, the filing said.

Earnings before interest, tax, depreciation and amortization, a gauge of operational profitability known as EBITDA, rose to a record $9.18 billion. Analysts estimated EBITDA of $8.73 billion in the period, the poll showed.

EBITDA, including the one-off asset sale, surged to an average 67 percent of revenue in the first quarter, compared with 41.7 percent in the year-ago period and a 40.2 percent forecast in the poll.

BETTER-THAN-EXPECTED SEQUENTIAL DATA

As a result, Vale piled up 6 percent more cash in the quarter, leaving its cash holdings at $11.81 billion. In the opinion of BTG Pactual analyst Edmo Chagas, more cash could open room for increased dividends payments and acquisitions.

On a sequential basis, the sale of the aluminum assets and decreasing sales, general and administrative expenses helped push profit up by 15 percent from $5.92 billion reais in the fourth quarter of last year, the filing said.

SG&A expenses fell to 419 million reais in the first quarter from 647 million reais in the fourth quarter of 2010. Financial expenses tumbled on a quarter-on-quarter basis, while Vale posted a 239 million reais gain with derivatives contracts.

Quarter-on-quarter numbers 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.

Compared with the year earlier, Vale shipped and sold 3.7 percent more iron ore and pellets.

American depositary receipts of Vale rose 0.03 percent to close at $30.91 in New York ahead of the earnings report. The stock, which had fallen in the past three sessions, has shed 10.6 percent this year.

Management will discuss the first quarter results on a conference call on Friday.

(Additional reporting by Jose de Castro in Sao Paulo; Editing by Bernard Orr, Robert MacMillan and Tim Dobbyn)

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