(Reuters) - Canadian diversified miner Teck Resources Ltd TCKb.TO reported a sharp drop in fourth-quarter earnings as higher copper sales failed to offset the impact of sagging coal prices.
The company said economic uncertainty in Europe and the United States and less-robust growth rates in China and other emerging markets would continue to hurt both demand and prices for some of its products, particularly coal.
“We believe that the medium to longer term fundamentals for steelmaking coal are quite favorable, although, the recent weakness in the seaborne steelmaking coal market is expected to persist for at least the first half of 2013,” Teck said in a statement.
With some 6 million metric tonnes of coal already contracted for sale in the first quarter, and more expected, the miner expects 2013 coal output of 24.0 million to 25.0 million tonnes.
Copper production is expected to fall to 340,000 to 360,000 tonnes in 2013, compared with 373,000 tonnes in 2012, on declining output at the Quebrada Blanca mine in Chile and lower ore grades at Highland Valley Copper in Canada.
Fourth-quarter coal production was 6.4 million tonnes, compared with 6.7 million tonnes a year earlier. Copper production rose to 103,000 tonnes from 89,000 tonnes.
The average price of copper in the quarter rose 6 percent to $3.59 per pound from $3.40, while the average coal price fell 37 percent to $159 per metric tonne from $253.
Earnings attributable to shareholders were C$145 million, or 25 Canadian cents per share, compared with C$637 million, or C$1.08 per share, a year earlier.
Adjusted to remove one-time items, the profit was C$354 million, or 61 Canadian cents a share, compared with C$613 million, or C$1.04 a share, a year earlier.
On that basis, analysts on average had expected earnings of 48 Canadian cents per share, according to Thomson Reuters I/B/E/S.
Revenue fell 10 percent to C$2.7 billion, while analysts had forecast C$2.55 billion.
Reporting by Julie Gordon. Editing by Jane Merriman and Lisa Von Ahn