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Southern Copper Corporation (SCCO - Free Report) reported fourth-quarter 2022 earnings of $1.17 per share, which beat the Zacks Consensus Estimate of 80 cents. The bottom line improved 46% from the prior-year quarter, primarily driven by higher sales volumes for copper, silver and zinc and lower operating cash cost per pound of copper that helped offset the impact of lower prices of these metals.
Net sales were $2,820 million, flat year over year. The top line surpassed the Zacks Consensus Estimate of $2,496 million. Revenues were primarily driven by higher sales volumes for copper (2.1%), silver (6.4%) and zinc (38.2%) which was somewhat offset by a 15.7% drop in molybdenum sales volumes. Prices for molybdenum increased 14.2% during the quarter while prices dropped for copper, silver and zinc declined 17.5%, 11.1% and 9.0% respectively.
Operating cash cost per pound of copper (net of by-product revenue credits) was 45 cents in the quarter under review, down 42% from the year-ago quarter. Total operating costs moved up 12% year over year to $1,450 million.
Southern Copper Corporation Price, Consensus and EPS Surprise
Operating profit declined 10.5% to $1,370 million. The operating margin in the reported quarter was 48.6% compared with 54.2% in the prior-year quarter.
Adjusted EBITDA declined 5% year over year to $1,647 million in fourth-quarter 2022. Adjusted EBITDA margin was 58.4% compared with the year-ago quarter figure of 61.1%.
Production Details
Copper: SCCO mined 241,273 tons of copper in the reported quarter, up 2% year over year. The company reported higher production at the Peruvian mines which were driven by an uptick in ore recoveries. Copper production at Mexican mines was in line with last year. In 2022, copper production was down 6.6% year over year to 894,703 tons due to a temporary drop in ore grades and the stoppage at Cuajone.
Molybdenum: The company mined 6,735 tons of molybdenum in the reported quarter, reflecting a year-over-year decline of 15.6% attributed to lower production at Toquepala. Molybdenum production was 26,240 tons in 2022 compared with 30,262 tons in 2021.
Zinc: The company’s zinc production decreased 7.4% year over year to 15,263 tons in the quarter under review owing to lower output at the Charcas unit. Zinc production decreased 10% year over year to 60,010 tons in 2022.
Silver: Southern Copper’s silver production improved 9.6% year over year to 4,960,000 ounces due to higher production at Buenavista, IMMSA and Cuajone operations. In 2022, silver production was down 2% year over year due tto lower output at the Peruvian operations and at the La Caridad mine. This was partially offset by higher production at Buenavista and IMMSA mines.
Financials
Southern Copper generated net cash from operating activities of $2.8 billion in 2022 down from $4.3 billion in the prior year, attributable to higher metal prices and cost-control efficiencies. Cash and cash equivalents were $2.07 billion at the end of 2022 compared with $3 billion as of 2021 end. Long-term debt was $6.25 billion in 2022 end, flat with the prior year. SCCO made capital investments worth $948.5 million during 2022, 6.3% higher than the prior year’s spending.
Fiscal 2022 Performance
SCCO’s adjusted earnings were $3.41 in fiscal 2022, which beat the Zacks Consensus Estimate of $3.05. However, earnings were down 22% compared with the prior year.
Total revenues declined 8% year over year to $10 billion, which beat the Zacks Consensus Estimate of $9.7 million. The company witnessed lower sales volume for copper, silver and molybdenum in 2022 while zinc volumes were up. Zinc and molybdenum prices were 16.2% and 20% throughout the year which was offset by the decline in copper and silver prices of 5.4% and 13.6% respectively.
Price Performance
Image Source: Zacks Investment Research
Shares of Southern Copper have declined 18.8% in the past year against the industry’s 31.6% growth.
Zacks Rank & Stocks to Consider
Southern Copper currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Cal-Maine Foods, Inc. (CALM - Free Report) and Clearwater Paper Corporation (CLW). CALM and CLW both sport a Zacks Rank #1 (Strong Buy), while CRS carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has an earnings growth rate of 203.8% for the current year. The firm outpaced Zacks Consensus Estimate in all of the last four quarters. It delivered a trailing four-quarter earnings surprise of 33.6% on average. CRS shares have gained 73.9% in the past year
Cal-Maine’s shares have gained 29.9% in the past year. The company has an earnings growth rate of 417.7% for the current year. The Zacks Consensus Estimate for CALM’s current-year earnings has been revised 73.8% upward in the past 60 days.
The company topped Zacks Consensus Estimate in three of the last fourth quarters. It delivered a trailing four-quarter earnings surprise of 15.3% on average.
CLW’s shares have gained 29.7% in the past year. The company has an earnings growth rate of 278.6% for the current year.
Clearwater Paper beat Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 13% on average.
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Southern Copper (SCCO) Q4 Earnings Beat Estimates, Rise Y/Y
Southern Copper Corporation (SCCO - Free Report) reported fourth-quarter 2022 earnings of $1.17 per share, which beat the Zacks Consensus Estimate of 80 cents. The bottom line improved 46% from the prior-year quarter, primarily driven by higher sales volumes for copper, silver and zinc and lower operating cash cost per pound of copper that helped offset the impact of lower prices of these metals.
Net sales were $2,820 million, flat year over year. The top line surpassed the Zacks Consensus Estimate of $2,496 million. Revenues were primarily driven by higher sales volumes for copper (2.1%), silver (6.4%) and zinc (38.2%) which was somewhat offset by a 15.7% drop in molybdenum sales volumes. Prices for molybdenum increased 14.2% during the quarter while prices dropped for copper, silver and zinc declined 17.5%, 11.1% and 9.0% respectively.
Operating cash cost per pound of copper (net of by-product revenue credits) was 45 cents in the quarter under review, down 42% from the year-ago quarter. Total operating costs moved up 12% year over year to $1,450 million.
Southern Copper Corporation Price, Consensus and EPS Surprise
Southern Copper Corporation price-consensus-eps-surprise-chart | Southern Copper Corporation Quote
Operating profit declined 10.5% to $1,370 million. The operating margin in the reported quarter was 48.6% compared with 54.2% in the prior-year quarter.
Adjusted EBITDA declined 5% year over year to $1,647 million in fourth-quarter 2022. Adjusted EBITDA margin was 58.4% compared with the year-ago quarter figure of 61.1%.
Production Details
Copper: SCCO mined 241,273 tons of copper in the reported quarter, up 2% year over year. The company reported higher production at the Peruvian mines which were driven by an uptick in ore recoveries. Copper production at Mexican mines was in line with last year. In 2022, copper production was down 6.6% year over year to 894,703 tons due to a temporary drop in ore grades and the stoppage at Cuajone.
Molybdenum: The company mined 6,735 tons of molybdenum in the reported quarter, reflecting a year-over-year decline of 15.6% attributed to lower production at Toquepala. Molybdenum production was 26,240 tons in 2022 compared with 30,262 tons in 2021.
Zinc: The company’s zinc production decreased 7.4% year over year to 15,263 tons in the quarter under review owing to lower output at the Charcas unit. Zinc production decreased 10% year over year to 60,010 tons in 2022.
Silver: Southern Copper’s silver production improved 9.6% year over year to 4,960,000 ounces due to higher production at Buenavista, IMMSA and Cuajone operations. In 2022, silver production was down 2% year over year due tto lower output at the Peruvian operations and at the La Caridad mine. This was partially offset by higher production at Buenavista and IMMSA mines.
Financials
Southern Copper generated net cash from operating activities of $2.8 billion in 2022 down from $4.3 billion in the prior year, attributable to higher metal prices and cost-control efficiencies. Cash and cash equivalents were $2.07 billion at the end of 2022 compared with $3 billion as of 2021 end. Long-term debt was $6.25 billion in 2022 end, flat with the prior year. SCCO made capital investments worth $948.5 million during 2022, 6.3% higher than the prior year’s spending.
Fiscal 2022 Performance
SCCO’s adjusted earnings were $3.41 in fiscal 2022, which beat the Zacks Consensus Estimate of $3.05. However, earnings were down 22% compared with the prior year.
Total revenues declined 8% year over year to $10 billion, which beat the Zacks Consensus Estimate of $9.7 million. The company witnessed lower sales volume for copper, silver and molybdenum in 2022 while zinc volumes were up. Zinc and molybdenum prices were 16.2% and 20% throughout the year which was offset by the decline in copper and silver prices of 5.4% and 13.6% respectively.
Price Performance
Image Source: Zacks Investment Research
Shares of Southern Copper have declined 18.8% in the past year against the industry’s 31.6% growth.
Zacks Rank & Stocks to Consider
Southern Copper currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Cal-Maine Foods, Inc. (CALM - Free Report) and Clearwater Paper Corporation (CLW). CALM and CLW both sport a Zacks Rank #1 (Strong Buy), while CRS carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has an earnings growth rate of 203.8% for the current year. The firm outpaced Zacks Consensus Estimate in all of the last four quarters. It delivered a trailing four-quarter earnings surprise of 33.6% on average. CRS shares have gained 73.9% in the past year
Cal-Maine’s shares have gained 29.9% in the past year. The company has an earnings growth rate of 417.7% for the current year. The Zacks Consensus Estimate for CALM’s current-year earnings has been revised 73.8% upward in the past 60 days.
The company topped Zacks Consensus Estimate in three of the last fourth quarters. It delivered a trailing four-quarter earnings surprise of 15.3% on average.
CLW’s shares have gained 29.7% in the past year. The company has an earnings growth rate of 278.6% for the current year.
Clearwater Paper beat Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 13% on average.