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Teck Resources Limited TECK recently provided an update regarding its second-quarter 2022 steelmaking coal sales volumes and realized prices.
Teck Resources’ second-quarter steelmaking coal sales were 6.3 million tons in the June-ended quarter, higher than the volume of 6.2 million reported in the year-ago quarter. The figure matched the low end of the company's guidance in the band of 6.3-6.7 million tons.
Teck Resources reported an average realized steelmaking coal price in the second quarter of $453 per ton, backed by record steelmaking coal FOB prices. It marked an increase in steelmaking coal prices from $357 per ton in the first quarter of 2022. The company, however, expects to record provisional pricing adjustments of a negative $73 million in the quarter due to the dip in coal prices at the end of the second quarter.
TECK reported steelmaking coal sales of 6 million tons in the first quarter of 2022, which fell short of the guidance of 6.1 to 6.5 million tons due to logistics disruptions in British Columbia, Canada. The shutdown of the Canadian Pacific Railway's CP operations due to a wage and pension-related dispute with its union had an impact on the mining industry, and Teck Resources was no exception. TECK’s volumes bore the brunt of the CP Rail work stoppage that interrupted rail service to its steelmaking coal operations.
Despite the setback, the Steelmaking Coal segment's sales soared 164% year over year in the first quarter of 2022 to $2,178 million, mainly on high steel pricing. The segment reported profit before taxes of $1,434 million compared with $140 million in the prior-year quarter. A higher realized steelmaking coal price in the quarter and higher volumes are expected to get reflected in the company’s second-quarter results. Its results are also anticipated to reflect higher zinc, gold and lead prices (offset by lower copper and silver prices) when the company reports its results on Jul 27.
The Zacks Consensus Estimate for the second quarter is currently pegged at $4.10 billion, suggesting year-over-year growth of 97%. The same for earnings stands at $2.41, indicating a whopping surge of 372% from the 51 cents reported in the last-year quarter.
Price Performance
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Teck Resources shares have rallied 29% in the past year against the industry's decline of 24.8%.
Zacks Rank
Teck Resources currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the basic materials space are Albemarle Corporation ALB and Cabot Corporation CBT, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Albemarle has a projected earnings growth rate of 231.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 112.4% upward in the past 60 days.
Albemarle's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 20%. ALB has rallied roughly 21% in a year.
Cabot has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 6% upward in the past 60 days.
Cabot's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 16.2%. CBT has risen around 16% in a year.
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Canadian Pacific Railway Limited (CP) : Free Stock Analysis Report
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