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What's in the Cards for MP Materials' (MP) Q2 Earnings?

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MP Materials Corp. (MP - Free Report) is scheduled to report second-quarter 2021 results after the closing bell on Aug 5.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $57.6 million. The consensus mark for earnings stands at 12 cents per share. The earnings estimate has moved down 8% over the past 30 days.

Q1 Results

In the last reported quarter, MP Materials reported year-over-year improvement in both revenues and earnings. Both the metrics also beat the Zacks Consensus Estimate.

Factors to Note

The accelerating global transformation toward electrification and decarbonization has been creating strong demand for critical rare earth materials. The company has been implementing efficiency improvements in the processing of rare earth materials, which has resulted in significantly higher production of rare earth oxide (REO) starting in the second half of 2019. In the first quarter of 2021, MP Materials produced 9,849 metric tons of contained REO in concentrate, up 2% year over year due to a modest improvement in the efficiency of processing operations and an increased ore feed rate. REO sales volume went up 18% year over year to 9,793 Mt in the first quarter. This trend is expected to have continued in the second quarter courtesy of the efficiency improvement efforts of the company.

Higher raw material costs and COVID-19 impacted logistics costs witnessed through the second quarter might have impacted margins. Nevertheless, per unit production costs owing to continued operational efficiencies, benefits from higher sales volumes and increased realized pricing driven by higher market prices may have offset some of this impact on the company’s bottom-line performance in the quarter to be reported.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for MP Materials this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here as you will see below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for MP Materials is -11.29%.

Zacks Rank: The company currently has a Zacks Rank #4 (Sell).

Price Performance

MP Materials’ shares have soared 222.8% in the past year compared with the industry’s rally of 32%.

Zacks Investment Research
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Stocks Poised to Beat Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Westlake Chemical Corporation WLK has an Earnings ESP of +1.58% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Olympic Steel, Inc. ZEUS has an Earnings ESP of +31.84% and a Zacks Rank of 1 currently.

Domtar Corporation UFS currently has a Zacks Rank #3 and an Earnings ESP of +5.56%.

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