Thompson Creek Metals Company Inc. (TC) on Monday reported a 46 percent surge in profit for the third quarter as a gain on common stock warrants offset a decline in revenues. However, excluding items, adjusted earnings plunged and missed analysts' expectations. The company also reported lower molybdenum production and sales volumes for the quarter.
Looking ahead, the Denver, Colorado-based company said that lower molybdenum prices and increased sales of lower margin third party purchased and processed molybdenum will likely impact its performance in the fourth quarter.
The company's net income for the third quarter rose to $45.6 million or $0.27 per share from $31.1 million or $0.22 per share in the year-ago period.
The latest quarter's results include a non-cash unrealized gain on common stock warrants of $42.0 million or $0.25 per share, while the year-ago quarter's results included a non-cash unrealized loss on common stock warrants of $20.5 million or $0.14 per share.
However, adjusted earnings plunged to $3.6 million or $0.02 per share from $51.6 million or $0.36 per share in the same period last year. On average, five analysts polled by Thomson Reuters expected the company to earn $0.03 per share for the quarter. Analysts estimates typically exclude special items.
Revenue for the quarter declined 4.3 percent to $154.8 million from $161.8 million in the year-ago period. Analysts had a consensus estimate of $119.70 million.
Molybdenum sales declined to $150.4 million from $157.1 million in the same period last year.
Mined molybdenum production dropped 52 percent to 3.70 million pounds from 7.69 million pounds a year ago. Sales volumes were 9.62 million pounds of molybdenum, down 11 percent from 10.78 million pounds in the same period last year, while average realized sales price increased slightly to $15.64 per pound from $15.30 per pound in the year-ago period.
Looking ahead to the fourth quarter, Thompson Creek said that the combination of lower molybdenum prices and increased sales of lower margin third party purchased and processed molybdenum will likely impact its performance.
Kevin Loughrey, Chairman and Chief Executive Officer of Thompson Creek said, "We anticipate that over the balance of 2011 our average price for molybdenum sales will likely be lower than our year-to-date average due to price weakness experienced in the fourth quarter."
For fiscal year 2011, Thompson Creek reaffirmed its guidance for annual production.
For fiscal year 2012, the company maintained its outlook for total molybdenum production in a range of 26 million to 28 million pounds, while total sales of molybdenum produced at the company's mines are expected to be 26 million to 29 million pounds.
Further ahead, Thompson Creek expects molybdenum production for fiscal year 2013 of 30 million to 34 million pounds and sales of molybdenum produced at the company's mines in a range of 30 million to 34 million pounds.
TC closed Monday's trading at $7.39, up $0.17 or 2.35 percent on a volume of 1.75 million shares. In after-hours, the stock declined $0.20 or 2.71 percent to $7.19.
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