Rare earths miner Molycorp, Inc. (MCP: Quote) on Thursday reported a loss for the second quarter and said it will need to secure additional financing to fund its 2012 capital expenditures due to less than expected cash flow from operations. The company's shares declined more than 10 percent in extended trading following the news.
Colorado-based Molycorp noted that higher sales in the quarter were offset by lower product volumes shipped, lower prices, costs related to the Project Phoenix transition, and other transaction costs related to acquisition of Molycorp Canada.
Costs excluding depreciation and amortization for the quarter more than doubled from last year to $103.57 million. Operating expenses, such as selling, general and administrative expenses as well as research and development expenses were sharply higher compared to the prior year.
Moylcorp's second-quarter net loss was $67.60 million or $0.71 per share, compared to net income of $47.79 million or $0.53 per share in the year-ago period.
Excluding items, adjusted net loss per share for the quarter was $0.03. On average, 4 analysts polled by Thomson Reuters expected the company to earn $0.08 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter rose 5 percent to $104.58 million from $99.62 million in the year-ago period. Two analysts had a consensus revenue estimate of $115.56 million.
Molycorp noted that during the second quarter, prices for most of its products have stabilized or declined at a much slower pace than earlier in the year. The company expects this trend may continue in the third and fourth quarter.
Looking ahead, Molycorp said it expects cash flow from operations for the remainder of 2012 will be less than expected. Accordingly, the company noted that it will need to secure additional financing for a substantial portion of its remaining 2012 capital expenditures and other cash requirements.
Molycorp believes it is well positioned for year-over-year sales growth due to the Mountain Pass ramp-up, existing customer orders, growing pipeline of global business opportunities and acquisitions.
For fiscal 2012, Molycorp reaffirmed its annual production of rare earth oxide or REO equivalent products in a range of 8,000 metric tons to 10,000 metric tons across its Mountain Pass, Sillamäe and Tolleson facilities, which does not include production from its newly-acquired Molycorp Canada operations.
MCP closed Thursday's regular trading session at $16.07, down $0.55 or 3.31 percent on a volume of 4.66 million shares. In after-hours, the stock further declined $1.67 or 10.39 percent to $14.40.
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by RTT Staff Writer
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