Teck down after announcing 44% profit hit
Blaming lower prices for its "key products", Teck Resources (NYSE: TCK) reported a 44.5% profit drop of $1.0 billion, or $1.74 per share, compared with $1.8 billion or $3.03 per share in 2012.
The diversified miner, which released its unaudited fourth quarter results for 2013, was down 6.62% to $23.68 per share on the NYSE.
While the company touted higher production and more cost savings, it couldn't overcome steep price declines for commodities in 2013:
"We achieved record annual steelmaking coal sales, had record throughput at three of our mines, implemented approximately $360 million in savings from our cost reduction program and, with our partners," said said Don Lindsay, President and CEO, in a news release.
"However, prices for all of our key products were down compared to last year, resulting in lower profits and cash flows than in 2012."
Looking forward, the company saw further squeezes due to more supply and currency issues.
"While we believe that the longer term fundamentals for steelmaking coal, copper and zinc are favorable, the recent weakness in some of these markets may well persist for some time."
The company forecast that new sources of supply will put downward pressure on coal prices. The falling US dollar means operating costs and capital spending will rise.
In 2014 Teck expects a drop in copper production as a result of lower production from Quebrada Blanca with less dump leach production and from Antamina as the mine enters a period of significantly lower grades. The company expected 320,000 to 340,000 tonnes compared with 364,000 tonnes produced in 2013.
The outlook for coal depended upon buyers.
"Our actual production will depend primarily on customer demand for deliveries of steelmaking coal. Depending on market conditions and the sales outlook, we may adjust our production plans.
Zinc concentrate was also going to decline in 2014 from 623,000 tonnes to in the range of 555,000 to 585,000 due to production decreases at Antamina and Red Dog.