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MP Materials (MP) Q4 Earnings Match Estimates, Revenues Miss
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MP Materials Corp. (MP - Free Report) reported adjusted loss per share of 5 cents in fourth-quarter 2023, in-line with the Zacks Consensus Estimate. The company had reported an earnings per share of 39 cents in the fourth quarter of 2022. Earnings were impacted by lower prices and sales volumes in the quarter.
Including one-time items, the company reported a loss of 9 cents per share in the fourth quarter of 2023 against earnings of 36 cents per share in the fourth quarter of 2022.
The company generated revenues of $41 million in the quarter under review, reflecting a year-over-year slump of 56%. The top line missed the Zacks Consensus Estimate of $47 million. This weaker-than-expected performance was due to lower volumes and realized sales prices of rare earth oxide (“REO”) in concentrate.
The realized sales price per REO MT was down 34% year over year to $5,622. The REO production volume declined to 9,257 Mt, down 12% from the year-ago quarter’s 10,485 MT. Production was impacted by an increase in unplanned downtime in the fourth quarter. Sales volumes were 34% lower than the year-ago quarter at 7,174 Mt. The decline in volumes was attributed to the transition to midstream production of NdPr oxide and slightly lower upstream production volumes.
MP Materials Corp. Price, Consensus and EPS Surprise
Production cost moved up 24% year over year to $2,393 per MT of REO. The increase was mainly due to the descaling impact of lower REO sales, a longer and more detailed plant turnaround and higher payroll costs from the implementation of its Stage II strategy.
The fourth quarter of 2023 also included a write-down of $2.3 million on certain inventories attributable to elevated carrying costs of initial production of separated products. Increased general and administrative costs were driven by higher corporate personnel and infrastructure costs required to build MP Materials’ corporate infrastructure in support of its downstream expansion.
Adjusted EBITDA plunged 98% year over year to $1.3 million. The downside was due to lower per-unit profitability, as well as higher personnel and other general and administrative costs. Lower realized prices and higher production costs led to the decline in per-unit profitability.
Fiscal 2023 Performance
The company started trial production of NdPr metal in 2023, producing 200 metric tons. MP Materials also produced 41,557 metric tons of REO in concentrate. Sales volumes were reported at 36,837 metric tons of REO, leading to revenues of $253.4 million. The figure missed the Zacks Consensus Estimate of $260 million.
MP Materials reported adjusted earnings per share of 28 cents in 2023 compared with $1.65 in 2022. Earnings missed the Zacks Consensus Estimate of 29 cents per share for 2023. Including one-time items, earnings were 14 cents per share in 2023 compared with $1.69 in 2022.
MP ended 2023 with $997.8 million of cash, cash equivalents and short-term investments and $307.8 million of net cash on the balance sheet.
Price Performance
In the past year, MP Materials’ shares have declined 58.4% compared with the industry’s 0.3% decline.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
MP Materials currently sports a Zacks Rank #4 (Sell).
The Zacks Consensus Estimate for Carpenter Technology’s 2024 earnings is pegged at $3.96 per share. The consensus estimate for 2024 earnings has moved 11% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 14.3%. CRS shares have gained 39% in a year.
The Zacks Consensus Estimate for Ecolab’s 2024 earnings is pegged at $6.39 per share, indicating an increase of 22.7% from the prior year’s reported number. It has an average trailing four-quarter earnings surprise of 1.7%. ECL shares have gained 34.3% in a year.
Alpha Metallurgical Resources has an average trailing four-quarter earnings surprise of 9.6%. The Zacks Consensus Estimate for AMR’s 2024 earnings is pegged at $43.05 per share. Earnings estimates have moved 48% north in the past 60 days. AMR shares have rallied 150% in a year’s time.
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MP Materials (MP) Q4 Earnings Match Estimates, Revenues Miss
MP Materials Corp. (MP - Free Report) reported adjusted loss per share of 5 cents in fourth-quarter 2023, in-line with the Zacks Consensus Estimate. The company had reported an earnings per share of 39 cents in the fourth quarter of 2022. Earnings were impacted by lower prices and sales volumes in the quarter.
Including one-time items, the company reported a loss of 9 cents per share in the fourth quarter of 2023 against earnings of 36 cents per share in the fourth quarter of 2022.
The company generated revenues of $41 million in the quarter under review, reflecting a year-over-year slump of 56%. The top line missed the Zacks Consensus Estimate of $47 million. This weaker-than-expected performance was due to lower volumes and realized sales prices of rare earth oxide (“REO”) in concentrate.
The realized sales price per REO MT was down 34% year over year to $5,622. The REO production volume declined to 9,257 Mt, down 12% from the year-ago quarter’s 10,485 MT. Production was impacted by an increase in unplanned downtime in the fourth quarter.
Sales volumes were 34% lower than the year-ago quarter at 7,174 Mt. The decline in volumes was attributed to the transition to midstream production of NdPr oxide and slightly lower upstream production volumes.
MP Materials Corp. Price, Consensus and EPS Surprise
MP Materials Corp. price-consensus-eps-surprise-chart | MP Materials Corp. Quote
Production cost moved up 24% year over year to $2,393 per MT of REO. The increase was mainly due to the descaling impact of lower REO sales, a longer and more detailed plant turnaround and higher payroll costs from the implementation of its Stage II strategy.
The fourth quarter of 2023 also included a write-down of $2.3 million on certain inventories attributable to elevated carrying costs of initial production of separated products. Increased general and administrative costs were driven by higher corporate personnel and infrastructure costs required to build MP Materials’ corporate infrastructure in support of its downstream expansion.
Adjusted EBITDA plunged 98% year over year to $1.3 million. The downside was due to lower per-unit profitability, as well as higher personnel and other general and administrative costs. Lower realized prices and higher production costs led to the decline in per-unit profitability.
Fiscal 2023 Performance
The company started trial production of NdPr metal in 2023, producing 200 metric tons. MP Materials also produced 41,557 metric tons of REO in concentrate. Sales volumes were reported at 36,837 metric tons of REO, leading to revenues of $253.4 million. The figure missed the Zacks Consensus Estimate of $260 million.
MP Materials reported adjusted earnings per share of 28 cents in 2023 compared with $1.65 in 2022. Earnings missed the Zacks Consensus Estimate of 29 cents per share for 2023. Including one-time items, earnings were 14 cents per share in 2023 compared with $1.69 in 2022.
MP ended 2023 with $997.8 million of cash, cash equivalents and short-term investments and $307.8 million of net cash on the balance sheet.
Price Performance
In the past year, MP Materials’ shares have declined 58.4% compared with the industry’s 0.3% decline.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
MP Materials currently sports a Zacks Rank #4 (Sell).
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , Ecolab Inc. (ECL - Free Report) and Alpha Metallurgical Resources, Inc. (AMR - Free Report) . Each of these three 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 Carpenter Technology’s 2024 earnings is pegged at $3.96 per share. The consensus estimate for 2024 earnings has moved 11% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 14.3%. CRS shares have gained 39% in a year.
The Zacks Consensus Estimate for Ecolab’s 2024 earnings is pegged at $6.39 per share, indicating an increase of 22.7% from the prior year’s reported number. It has an average trailing four-quarter earnings surprise of 1.7%. ECL shares have gained 34.3% in a year.
Alpha Metallurgical Resources has an average trailing four-quarter earnings surprise of 9.6%. The Zacks Consensus Estimate for AMR’s 2024 earnings is pegged at $43.05 per share. Earnings estimates have moved 48% north in the past 60 days. AMR shares have rallied 150% in a year’s time.