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Teck (TECK) Misses on Q4 Earnings, To Spin Off Steelmaking Coal
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Teck Resources Ltd (TECK - Free Report) reported fourth-quarter 2022 adjusted earnings per share (EPS) of 79 cents, missing the Zacks Consensus Estimate of 96 cents. The bottom line plunged 61% from the prior-year quarter. The downside was due to lower prices for all of TECK’s principal products, steelmaking coal sales volumes and lower by-product volumes. Elevated unit operating costs across all business units also impacted the results.
The company announced the spin-off of the steelmaking coal business and reorganization of its business to separate into two independent, publicly-listed companies — Teck Metals Corp. and Elk Valley Resources Ltd.
Including one-time items, the company reported EPS of 38 cents in the fourth quarter of 2022 compared with the prior-year quarter’s $2.17.
Teck Resources Ltd Price, Consensus and EPS Surprise
Net sales amounted to $2,309 million, indicating a 30.7% year-over-year decline. The top line also missed the Zacks Consensus Estimate of $2,621 million.
The gross profit, before depreciation and amortization, came in at CAD$1,538 million ($1,131 million), down 38.2% from the prior-year quarter. The gross margin came in at 36.8% compared with the year-ago quarter’s 50.4%. The adjusted EBITDA was CAD$1,333 million ($980 million), which marked a 47% slump from the year-earlier period. The EBITDA margin came in at 42.5% in the fourth quarter compared with the year-earlier quarter’s 60.1%.
Segmental Performance
The Steelmaking Coal segment reported sales of CAD$1,676 million, reflecting a year-over-year decline of 27%. The segment reported a gross profit of CAD$849 million ($624 million) which was down 42% from the fourth quarter of 2021. The results bore the impact of lower realized steelmaking coal prices, a two-month plant outage at Elkview Operations and the impacts of extreme weather in December on the logistics chain.
The Copper segment’s net sales declined 18.5% year over year to CAD$753 ($554 million) million in the December-end quarter. The segment’s gross profit was CAD$248 million ($182 million) in the reported quarter, down 44% from the year-ago quarter on lower average realized copper price and lower sales volumes.
The Zinc segment’s net sales were down 28% year over year to CAD$711 ($523 million) in the reported quarter. The segment’s gross profit plunged 74% to CAD$57 million ($42 million) during this period due to the lower average realized zinc price and the impacts of the extended major maintenance activities on the KIVCET boiler at Trail Operations.
Financials
Teck Resources generated a cash flow of CAD$7,983 million ($6,141 million) from operating activities in 2022, up 67% year over year. The company had cash and cash equivalents of CAD$1,883 million ($1,388 million) at the end of 2022. Total debt was CAD$6,551 million ($4,828 million) at the end of 2022.
Other Updates
TECK completed the sale of an interest in Fort Hills to Suncor Energy Inc. and TotalEnergies EP Canada Ltd.
2022 Performance
Teck Resources reported an adjusted EPS of $6.99 in 2022 compared with $4.53 reported in the prior year. Earnings beat the Zacks Consensus Estimate of $6.87. Including one-time items, the bottom line was $5.87 compared with $4.25 per share in 2021.
Sales were up 34% year over year to $15.4 billion. The top line beat the Zacks Consensus Estimate of $13.97 billion.
Guidance
Teck Resources expects steelmaking coal production between 24 million tons and 26 million tons for 2023. Copper production is anticipated to be 390,000-445,000 tons. Zinc production is projected between 645,000 tons and 685,000 tons. Refined zinc is estimated between 270,000 tons and 290,000 tons.
For first-quarter 2023, the company expects sales of zinc in concentrate of 165,000-185,000 tons at Red Dog. Steelmaking coal sales are projected to be 6.0-6.4 million tons for the first quarter.
Price Performance
Image Source: Zacks Investment Research
The company’s shares have gained 19% in the past year against the industry’s 13.5% decline.
Zacks Rank & Other Stocks to Consider
Teck Resources currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for CalMaine Foods’ fiscal 2023 earnings per share is pegged at $16.75, suggesting 515.8% growth from the year-ago reported figure. Earnings estimates have moved 106.8% north in the past 60 days. CALM has a trailing four-quarter earnings surprise of 15.3%, on average. Its shares have gained 35% in the past year.
The Zacks Consensus Estimate for Reliance Steel’s earnings per share is pegged at $18.26 for 2023. Earnings estimates have been revised 7.4% upward in the past 60 days. RS has a trailing four-quarter average surprise of 13.4%, on average. The company has gained 41.6% in a year.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of 16.7%, on average. CMC has gained around 58% in a year. The consensus estimate for CMC's current-year earnings has been revised 10% upward in the past 60 days.
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Teck (TECK) Misses on Q4 Earnings, To Spin Off Steelmaking Coal
Teck Resources Ltd (TECK - Free Report) reported fourth-quarter 2022 adjusted earnings per share (EPS) of 79 cents, missing the Zacks Consensus Estimate of 96 cents. The bottom line plunged 61% from the prior-year quarter. The downside was due to lower prices for all of TECK’s principal products, steelmaking coal sales volumes and lower by-product volumes. Elevated unit operating costs across all business units also impacted the results.
The company announced the spin-off of the steelmaking coal business and reorganization of its business to separate into two independent, publicly-listed companies — Teck Metals Corp. and Elk Valley Resources Ltd.
Including one-time items, the company reported EPS of 38 cents in the fourth quarter of 2022 compared with the prior-year quarter’s $2.17.
Teck Resources Ltd Price, Consensus and EPS Surprise
Teck Resources Ltd price-consensus-eps-surprise-chart | Teck Resources Ltd Quote
Net sales amounted to $2,309 million, indicating a 30.7% year-over-year decline. The top line also missed the Zacks Consensus Estimate of $2,621 million.
The gross profit, before depreciation and amortization, came in at CAD$1,538 million ($1,131 million), down 38.2% from the prior-year quarter. The gross margin came in at 36.8% compared with the year-ago quarter’s 50.4%. The adjusted EBITDA was CAD$1,333 million ($980 million), which marked a 47% slump from the year-earlier period. The EBITDA margin came in at 42.5% in the fourth quarter compared with the year-earlier quarter’s 60.1%.
Segmental Performance
The Steelmaking Coal segment reported sales of CAD$1,676 million, reflecting a year-over-year decline of 27%. The segment reported a gross profit of CAD$849 million ($624 million) which was down 42% from the fourth quarter of 2021. The results bore the impact of lower realized steelmaking coal prices, a two-month plant outage at Elkview Operations and the impacts of extreme weather in December on the logistics chain.
The Copper segment’s net sales declined 18.5% year over year to CAD$753 ($554 million) million in the December-end quarter. The segment’s gross profit was CAD$248 million ($182 million) in the reported quarter, down 44% from the year-ago quarter on lower average realized copper price and lower sales volumes.
The Zinc segment’s net sales were down 28% year over year to CAD$711 ($523 million) in the reported quarter. The segment’s gross profit plunged 74% to CAD$57 million ($42 million) during this period due to the lower average realized zinc price and the impacts of the extended major maintenance activities on the KIVCET boiler at Trail Operations.
Financials
Teck Resources generated a cash flow of CAD$7,983 million ($6,141 million) from operating activities in 2022, up 67% year over year. The company had cash and cash equivalents of CAD$1,883 million ($1,388 million) at the end of 2022. Total debt was CAD$6,551 million ($4,828 million) at the end of 2022.
Other Updates
TECK completed the sale of an interest in Fort Hills to Suncor Energy Inc. and TotalEnergies EP Canada Ltd.
2022 Performance
Teck Resources reported an adjusted EPS of $6.99 in 2022 compared with $4.53 reported in the prior year. Earnings beat the Zacks Consensus Estimate of $6.87. Including one-time items, the bottom line was $5.87 compared with $4.25 per share in 2021.
Sales were up 34% year over year to $15.4 billion. The top line beat the Zacks Consensus Estimate of $13.97 billion.
Guidance
Teck Resources expects steelmaking coal production between 24 million tons and 26 million tons for 2023. Copper production is anticipated to be 390,000-445,000 tons. Zinc production is projected between 645,000 tons and 685,000 tons. Refined zinc is estimated between 270,000 tons and 290,000 tons.
For first-quarter 2023, the company expects sales of zinc in concentrate of 165,000-185,000 tons at Red Dog. Steelmaking coal sales are projected to be 6.0-6.4 million tons for the first quarter.
Price Performance
Image Source: Zacks Investment Research
The company’s shares have gained 19% in the past year against the industry’s 13.5% decline.
Zacks Rank & Other Stocks to Consider
Teck Resources currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the basic materials space are CalMaine Foods, Inc. (CALM - Free Report) , Reliance Steel & Aluminum Co. (RS - Free Report) and Commercial Metals Company (CMC - Free Report) . All these companies currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CalMaine Foods’ fiscal 2023 earnings per share is pegged at $16.75, suggesting 515.8% growth from the year-ago reported figure. Earnings estimates have moved 106.8% north in the past 60 days. CALM has a trailing four-quarter earnings surprise of 15.3%, on average. Its shares have gained 35% in the past year.
The Zacks Consensus Estimate for Reliance Steel’s earnings per share is pegged at $18.26 for 2023. Earnings estimates have been revised 7.4% upward in the past 60 days. RS has a trailing four-quarter average surprise of 13.4%, on average. The company has gained 41.6% in a year.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of 16.7%, on average. CMC has gained around 58% in a year. The consensus estimate for CMC's current-year earnings has been revised 10% upward in the past 60 days.