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Molycorp’s Q1 Loss Widens but Revenue and Adjusted Earnings Topped Estimates (MCP)

Shares of Molycorp Inc. (NYSE: MCP) skyrocketed on Friday after the rare-earth metals mining company, late last evening reported less-than-feared adjusted loss for the fiscal first quarter while revenue also showed strong growth.

For the fiscal first quarter, the Greenwood Village, Colorado-based Company reported net loss of $47.2 million or 33 cents a share compared to a net loss of $3.5 million or 7 cents a share, posted in the same quarter of last fiscal. In the recently concluded quarter, the Company included onetime charge of $37.2 million, linked to inventory write-down. In the same quarter of last fiscal, Molycorp included onetime items such as diligence expenses and inventory write-downs.

Stripping out the impact of onetime items, Molycorp reported adjusted or non-GAAP loss of 15 cents a share compared to 18 cents a share, in the year-earlier quarter.

Revenue during the quarter soared 71% to $146.4 million.

Analysts’ consensus estimate was for a loss of 27 cents a share on revenue of $138 million, according to a data compiled by Thomson Reuters.

The Company said that it sold 3,274 metric tons of metals, delivered across varied business sectors in the first quarter with an average selling price of $44.71 per K.G. In the preceding quarter (fourth quarter of last fiscal), the average selling price stood at $43.38 per K.G.

However, operating expenses, input expenses, research & developments expenses and impairment charges linked to the Mountain Pass facility, also rose in the fiscal first quarter.

The Company anticipates $450 million worth capital expenditure in the current fiscal year compared to $790 million spent in the last fiscal. For the remaining quarters, the Company expects capital expenditure of $250 million. Besides, it also expects to spend another $80 million for modernizing and expanding Mountain Pass in the next year.

At the end of the quarter, the Company had $404.8 million in cash and cash equivalents in hand.

Back in 2011, shares of Molycorp fell sharply after resource rich China removed restrictions on exports of rare earth metals in that year, sending prices of these metals sharply lower. Prices have stabilized since then.

 


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