Shares of Vancouver’s Teck Resources (TSX:TCK.B) were down more than 4% in the morning April 25 after the company announced its profit attributable to shareholders in 2017’s first quarter was $572 million or $0.99 per share.
While this is a jump compared with the same period last year, in which the company reported profit of $94 million ($0.16 per share), it misses analysts’ consensus earnings-per-share forecast of $1.04, as reported by Nasdaq.
The year-over-year increase was related to higher prices for zinc, copper and coal, but the company said it missed expectations because of low sales volumes.
“Substantially higher commodity prices had a significant positive effect on our financial results compared with the first quarter of 2016,” Teck president Don Lindsay said in a press release. “We set a monthly sales record in steelmaking coal in March, as we saw an increase in demand following a slow start to the quarter.
“We are now through the difficult winter weather and are seeing improvements in service levels from our logistics providers putting us in a strong position for the remainder of the year.”
Sales volumes of steelmaking coal dropped from 6.5 million tonnes in Q1 2016 to 5.9 million tonnes in 2017’s first quarter. Revenue jumped, however, from $665 million to $1,666 million as the realized price per tonne almost tripled from $102 to $283. This price increase was related to weather disruptions around the world that led to temporary mine closures and concerns about supply disruptions. The price continued to climb and spiked in April after Cyclone Debbie hampered supply in Australia.
Total revenue in Q1 was almost $2.9 billion, up from just under $1.7 billion in the same period last year, with the increase driven by steelmaking coal. Gross profit was almost $1.2 billion, compared with $155 million last year.
@EmmaHampelBIV
