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Southern Copper (SCCO) Q1 Earnings Top Estimates on High Prices
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Southern Copper Corporation (SCCO - Free Report) reported first-quarter 2021 earnings of 99 cents per share, which beat the Zacks Consensus Estimate of 89 cents. The whopping 254% year-over-year improvement was primarily driven by higher prices for copper, silver and zinc and stable operating costs.
Net sales were $2,352 million, up 47% year over year. Revenues were mainly driven by higher metal prices for copper (50.4%), silver (55.8%) and zinc (28.9%), which were slightly offset by lower sales volumes for copper and zinc.
Total operating costs inched down 0.5% year over year to $1,181 million. Operating profit soared 153% to $1,352 million on higher sales. Operating margin in the reported quarter was 53.4% compared with 31.0% in the prior-year quarter. Adjusted EBITDA increased 116% year over year to $1,554 million in first-quarter 2021. Adjusted EBITDA margin was 61.4% compared with the year-ago quarter figure of 41.8%.
Southern Copper Corporation Price, Consensus and EPS Surprise
Copper: Southern Copper mined 238,402 tons of copper during the reported quarter, down 1.5% year over year. Production increased in the IMMSA operations owing to higher production at the San Martin mine. However, lower production at Peruvian mines and La Caridad mine due to lower ore grades negated the improvement.
Molybdenum: The company mined 7,200 tons of molybdenum during the first quarter, reflecting slight year-over-year growth of 0.2%. Higher production at Peruvian mines were partially offset by a decrease in production at Buenavista.
Zinc: The company’s zinc production declined 14.5% year over year to 16,466 tons in the quarter under review. This was due to lower production at the Charcas, Santa Barbara and San Martin mines.
Silver: Southern Copper’s silver production decreased 6.3% year over year to 9,946,000 ounces due to lower production at Buenavista and IMMSA.
Financials
Southern Copper generated net cash from operating activities of $782 million in the first quarter of 2021 compared with $475 million in the prior-year quarter. Cash and cash equivalents were at $2,267 million at the end of the first quarter, up from $2,183 million as of 2020 end. Long-term debt was $6,545 million at the quarter end compared with $6,544 million as of 2020 end. The company made capital investments worth $232 million during the quarter under review.
The outlook for copper remains strong this year. The ongoing recovery in automobile industry and the $2 trillion infrastructure package announced by President Biden will significantly increase the demand for copper. Demand in China continues to remain strong. Given the low level of inventories, a deficit is expected this year for copper, which will further support its prices. This bodes well for Southern Copper.
Price Performance
Shares of Southern Copper have appreciated 121.9% over the past year compared with the industry’s rally of 193.3%.
Some other top-ranked stocks worth considering in the basic materials space include ArcelorMittal (MT - Free Report) , Celanese Corporation (CE - Free Report) and Dow Inc. (DOW - Free Report) . All of these stocks flaunt a Zacks Rank #1 currently.
ArcelorMittal has a projected earnings growth rate of 984.7% for the current fiscal. The company’s shares have soared around 179% in a year.
Celanese has an expected earnings growth rate of 68.3% for the current fiscal. The company’s shares have rallied around 90% in the past year.
Dow has a projected earnings growth rate of 261.6% for the current fiscal year. The company’s shares have gained around 75% in a year.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Bigstock
Southern Copper (SCCO) Q1 Earnings Top Estimates on High Prices
Southern Copper Corporation (SCCO - Free Report) reported first-quarter 2021 earnings of 99 cents per share, which beat the Zacks Consensus Estimate of 89 cents. The whopping 254% year-over-year improvement was primarily driven by higher prices for copper, silver and zinc and stable operating costs.
Net sales were $2,352 million, up 47% year over year. Revenues were mainly driven by higher metal prices for copper (50.4%), silver (55.8%) and zinc (28.9%), which were slightly offset by lower sales volumes for copper and zinc.
Total operating costs inched down 0.5% year over year to $1,181 million. Operating profit soared 153% to $1,352 million on higher sales. Operating margin in the reported quarter was 53.4% compared with 31.0% in the prior-year quarter. Adjusted EBITDA increased 116% year over year to $1,554 million in first-quarter 2021. Adjusted EBITDA margin was 61.4% compared with the year-ago quarter figure of 41.8%.
Southern Copper Corporation Price, Consensus and EPS Surprise
Southern Copper Corporation price-consensus-eps-surprise-chart | Southern Copper Corporation Quote
Operating Highlights
Copper: Southern Copper mined 238,402 tons of copper during the reported quarter, down 1.5% year over year. Production increased in the IMMSA operations owing to higher production at the San Martin mine. However, lower production at Peruvian mines and La Caridad mine due to lower ore grades negated the improvement.
Molybdenum: The company mined 7,200 tons of molybdenum during the first quarter, reflecting slight year-over-year growth of 0.2%. Higher production at Peruvian mines were partially offset by a decrease in production at Buenavista.
Zinc: The company’s zinc production declined 14.5% year over year to 16,466 tons in the quarter under review. This was due to lower production at the Charcas, Santa Barbara and San Martin mines.
Silver: Southern Copper’s silver production decreased 6.3% year over year to 9,946,000 ounces due to lower production at Buenavista and IMMSA.
Financials
Southern Copper generated net cash from operating activities of $782 million in the first quarter of 2021 compared with $475 million in the prior-year quarter. Cash and cash equivalents were at $2,267 million at the end of the first quarter, up from $2,183 million as of 2020 end. Long-term debt was $6,545 million at the quarter end compared with $6,544 million as of 2020 end. The company made capital investments worth $232 million during the quarter under review.
The outlook for copper remains strong this year. The ongoing recovery in automobile industry and the $2 trillion infrastructure package announced by President Biden will significantly increase the demand for copper. Demand in China continues to remain strong. Given the low level of inventories, a deficit is expected this year for copper, which will further support its prices. This bodes well for Southern Copper.
Price Performance
Shares of Southern Copper have appreciated 121.9% over the past year compared with the industry’s rally of 193.3%.
Zacks Rank & Other Stocks to Consider
Southern Copper currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Some other top-ranked stocks worth considering in the basic materials space include ArcelorMittal (MT - Free Report) , Celanese Corporation (CE - Free Report) and Dow Inc. (DOW - Free Report) . All of these stocks flaunt a Zacks Rank #1 currently.
ArcelorMittal has a projected earnings growth rate of 984.7% for the current fiscal. The company’s shares have soared around 179% in a year.
Celanese has an expected earnings growth rate of 68.3% for the current fiscal. The company’s shares have rallied around 90% in the past year.
Dow has a projected earnings growth rate of 261.6% for the current fiscal year. The company’s shares have gained around 75% in a year.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>