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Southern Copper (SCCO) Q2 Earnings Beat Estimates, Up Y/Y
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Southern Copper Corporation (SCCO - Free Report) reported second-quarter 2021 earnings of $1.21 per share, which beat the Zacks Consensus Estimate of $1.15. The whopping 256% year-over-year improvement was primarily driven by higher metal prices and the company’s efforts to improve cost efficiency and productivity.
Net sales were $2,897 million, up 62% year over year. The top line beat the Zacks Consensus Estimate of $2,826 million. Revenues were mainly driven by higher metal prices for copper (81.8%), molybdenum (68.6%), silver (61.9%), zinc (48.3%) and gold (6.2%).
Operating cash cost per pound of copper, including by-product revenue credits, was 59 cents the second quarter, up 11.5% from 66 cents reported in the year ago quarter. Total operating costs inched up 0.9% year over year to $986 million. Operating profit soared 190% to $1,675 million on higher sales. Operating margin in the reported quarter was 57.8% compared with 32.3% in the prior-year quarter. Adjusted EBITDA soared 142% year over year to $1,862 million in second-quarter 2021. Adjusted EBITDA margin was 64.3% compared with the year-ago quarter figure of 43.1%.
Southern Copper Corporation Price, Consensus and EPS Surprise
Copper: Southern Copper mined 237,110 tons of copper during the reported quarter, down 6.3% year over year. Decline in ore grades, due to stripping and maintenance works that were carried out this year after being postponed in 2020 on account of the COVID 19 pandemic, weighed on production numbers in the quarter.
The company expects copper production in 2021 to be around 960,000 tons.
Molybdenum: The company mined 6,982 tons of molybdenum during the reported quarter, reflecting a year-over-year drop of 10.8%. Higher production at Cuajone and La Caridad were offset by lower output at both the Toquepala and Buenavista mines.
Zinc: The company’s zinc production rose 8.9% year over year to 17,111 tons in the quarter under review. Higher production at both the Charcas mine and the San Martin mine was partially offset by lower production at the Santa Barbara mine.
Silver: Southern Copper’s silver production decreased 16.1% year over year to 4,644,000 ounces due to lower production at Buenavista, IMMSA and Toquepala operations.
Financials
Southern Copper generated net cash from operating activities of $1,061.5 million in the second quarter of 2021 compared with $419.3 million in the prior-year quarter. Cash and cash equivalents were at $2,394 million at the end of the second quarter, up from $2,183 million as of 2020 end. Long-term debt was $6,546 million at the quarter end compared with $6,544 million as of 2020 end. The company made capital investments worth $220 million during the quarter under review.
Price Performance
Shares of Southern Copper have appreciated 44.8% over the past year compared with the industry’s rally of 87%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Southern Copper currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Nucor Corporation (NUE - Free Report) , Cabot Corporation (CBT - Free Report) and Dow Inc. (DOW - Free Report) .
Nucor has a projected earnings growth rate of around 455.4% for the current year. The company’s shares have soared 130.6% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cabot has an expected earnings growth rate of around 137.5% for the current fiscal. The company’s shares have surged 42.4% in the past year. It currently flaunts a Zacks Rank #1.
Dow has an expected earnings growth rate of around 403.01% for the current year. The company’s shares have gained 45.4% in the past year. It currently carries a Zacks Rank #2.
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Southern Copper (SCCO) Q2 Earnings Beat Estimates, Up Y/Y
Southern Copper Corporation (SCCO - Free Report) reported second-quarter 2021 earnings of $1.21 per share, which beat the Zacks Consensus Estimate of $1.15. The whopping 256% year-over-year improvement was primarily driven by higher metal prices and the company’s efforts to improve cost efficiency and productivity.
Net sales were $2,897 million, up 62% year over year. The top line beat the Zacks Consensus Estimate of $2,826 million. Revenues were mainly driven by higher metal prices for copper (81.8%), molybdenum (68.6%), silver (61.9%), zinc (48.3%) and gold (6.2%).
Operating cash cost per pound of copper, including by-product revenue credits, was 59 cents the second quarter, up 11.5% from 66 cents reported in the year ago quarter. Total operating costs inched up 0.9% year over year to $986 million. Operating profit soared 190% to $1,675 million on higher sales. Operating margin in the reported quarter was 57.8% compared with 32.3% in the prior-year quarter. Adjusted EBITDA soared 142% year over year to $1,862 million in second-quarter 2021. Adjusted EBITDA margin was 64.3% compared with the year-ago quarter figure of 43.1%.
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 237,110 tons of copper during the reported quarter, down 6.3% year over year. Decline in ore grades, due to stripping and maintenance works that were carried out this year after being postponed in 2020 on account of the COVID 19 pandemic, weighed on production numbers in the quarter.
The company expects copper production in 2021 to be around 960,000 tons.
Molybdenum: The company mined 6,982 tons of molybdenum during the reported quarter, reflecting a year-over-year drop of 10.8%. Higher production at Cuajone and La Caridad were offset by lower output at both the Toquepala and Buenavista mines.
Zinc: The company’s zinc production rose 8.9% year over year to 17,111 tons in the quarter under review. Higher production at both the Charcas mine and the San Martin mine was partially offset by lower production at the Santa Barbara mine.
Silver: Southern Copper’s silver production decreased 16.1% year over year to 4,644,000 ounces due to lower production at Buenavista, IMMSA and Toquepala operations.
Financials
Southern Copper generated net cash from operating activities of $1,061.5 million in the second quarter of 2021 compared with $419.3 million in the prior-year quarter. Cash and cash equivalents were at $2,394 million at the end of the second quarter, up from $2,183 million as of 2020 end. Long-term debt was $6,546 million at the quarter end compared with $6,544 million as of 2020 end. The company made capital investments worth $220 million during the quarter under review.
Price Performance
Shares of Southern Copper have appreciated 44.8% over the past year compared with the industry’s rally of 87%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Southern Copper currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Nucor Corporation (NUE - Free Report) , Cabot Corporation (CBT - Free Report) and Dow Inc. (DOW - Free Report) .
Nucor has a projected earnings growth rate of around 455.4% for the current year. The company’s shares have soared 130.6% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cabot has an expected earnings growth rate of around 137.5% for the current fiscal. The company’s shares have surged 42.4% in the past year. It currently flaunts a Zacks Rank #1.
Dow has an expected earnings growth rate of around 403.01% for the current year. The company’s shares have gained 45.4% in the past year. It currently carries a Zacks Rank #2.