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Southern Copper (SCCO) Up 6.6% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Southern Copper (SCCO - Free Report) . Shares have added about 6.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Southern Copper due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Southern Copper reported second-quarter 2020 adjusted earnings of 34 cents per share, which beat the Zacks Consensus Estimate of 28 cents. The figure declined 35% from prior-year quarter figure of 52 cents primarily owing to lower sales and higher operating costs.
Net sales came in at $1,785 million, down 2% year over year. However, the top line surpassed the Zacks Consensus Estimate of $1,223 million. While the company witnessed higher volumes of copper, silver and molybdenum, lower metal prices led to lower sales in the quarter.
Total operating costs flared up 9% year over year to $1,208 million. Operating profit declined 19% to $577 million on lower sales and higher operating costs. Adjusted EBITDA declined 18% year over year to $770 million in second-quarter 2020. Adjusted EBITDA margin was 43% compared with the prior-year quarter figure of 52%.
Operating Highlights
Copper: Southern Copper mined 253,097 tons of copper during the reported quarter, down 1.3% year over year.
Molybdenum: The company mined 7,824 tons of molybdenum during the reported quarter, indicating year-over-year growth of 16%.
Zinc: The company’s zinc production declined 11.5% year over year to 15,706 tons in the quarter under review.
Silver: Southern Copper’s silver production rose 13.5% year over year to 5,538,000 ounces.
Financials
The company generated net cash from operating activities of $894.5 million in the first half of 2020 compared with $785 million in the prior-year comparable period.
Cash and cash equivalents were at $1,809 million at the end of second-quarter 2020 compared with $1,925 million as of fiscal 2019 end. Long-term debt was $6,543 million at the quarter end compared with $6,541 million as of 2019 end. The company made capital investments worth $113 million during the reported quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 22.22% due to these changes.
VGM Scores
Currently, Southern Copper has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Southern Copper has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Southern Copper (SCCO) Up 6.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Southern Copper (SCCO - Free Report) . Shares have added about 6.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Southern Copper due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Southern Copper Q2 Earnings, Revenues Beat Estimates
Southern Copper reported second-quarter 2020 adjusted earnings of 34 cents per share, which beat the Zacks Consensus Estimate of 28 cents. The figure declined 35% from prior-year quarter figure of 52 cents primarily owing to lower sales and higher operating costs.
Net sales came in at $1,785 million, down 2% year over year. However, the top line surpassed the Zacks Consensus Estimate of $1,223 million. While the company witnessed higher volumes of copper, silver and molybdenum, lower metal prices led to lower sales in the quarter.
Total operating costs flared up 9% year over year to $1,208 million. Operating profit declined 19% to $577 million on lower sales and higher operating costs. Adjusted EBITDA declined 18% year over year to $770 million in second-quarter 2020. Adjusted EBITDA margin was 43% compared with the prior-year quarter figure of 52%.
Operating Highlights
Copper: Southern Copper mined 253,097 tons of copper during the reported quarter, down 1.3% year over year.
Molybdenum: The company mined 7,824 tons of molybdenum during the reported quarter, indicating year-over-year growth of 16%.
Zinc: The company’s zinc production declined 11.5% year over year to 15,706 tons in the quarter under review.
Silver: Southern Copper’s silver production rose 13.5% year over year to 5,538,000 ounces.
Financials
The company generated net cash from operating activities of $894.5 million in the first half of 2020 compared with $785 million in the prior-year comparable period.
Cash and cash equivalents were at $1,809 million at the end of second-quarter 2020 compared with $1,925 million as of fiscal 2019 end. Long-term debt was $6,543 million at the quarter end compared with $6,541 million as of 2019 end. The company made capital investments worth $113 million during the reported quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 22.22% due to these changes.
VGM Scores
Currently, Southern Copper has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Southern Copper has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.