Teck swings to profit in Q4 but misses expectations
Canada’s largest diversified miner Teck Resources (TSX: TCK.A, TCK.B) (NYSE:TCK) reported Wednesday a net profit of $697 million for the fourth quarter of 2016, a welcomed turnaround from the year-ago loss, when it recorded one-time charges of C$536 million.
The Vancouver-based company, North America’s No.1 producer of coking coal, posted revenue of $2.66 billion for the fourth quarter ended Dec. 31. Its net profit attributable to shareholders, however fell short of Wall Street expectations at $1.21 per share. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of $1.43 per share.
The company clearly benefitted from a rally in coal prices last year, particularly the steelmaking kind, which were 155.5% higher at $207 a tonne in the quarter.
President and CEO Don Lindsay said Teck has come through one of the longest and deepest down cycles the mining industry has faced in the last few years, adding it is now a stronger company.
However, the miner recorded an expected impairment charge of $194 million on higher costs for its Fort Hill oil sands project. Last year, Teck booked one-time charges of $536 million.
It also revised down its forecast steelmaking coal sales to 6 million tonnes from 7.3 million tonnes for the first quarter of 2017.
Investors reacted negatively to the outlook and Teck’s shares were down 4.17% in Toronto to Cdn$32.20 at 10:23 am. They were also falling in New York, down 4.62% to $23.93 at 10:52 am ET.
Depite the drop, the miner’s stock has done well so far this year, climbing 25% since early January and has more than quadrupled its value in the last 12 months.