Teck Resources profit misses estimates as costs rise, shares slip
By Susan Taylor
TORONTO (Reuters) - Teck Resources Ltd TCKb.TO (TECK.N: Quote), North America's largest producer of steelmaking coal, reported earnings and revenue that lagged expectations on weakness at its zinc unit, sending its U.S.-listed shares down about 6 percent.
TD Securities analyst Greg Barnes said the earnings miss reflects lower sales and higher costs at Teck's zinc unit, which he had expected to report a gross profit of C$276 million.
The unit reported first quarter gross profit of C$164 million on increased operating costs and a 23 percent production drop at Red Dog mine, due to lower grades. Zinc in concentrate production fell to 130,000 tonnes from 165,000 tonnes in the same period last year.
Teck also lowered its 2017 zinc guidance to 590,000-615,000 tonnes from 660,000-680,000 tonnes previously, said Clarksons Platou analyst Jeremy Sussman, due to weather and electrical equipment failures at Red Dog.
U.S.-listed shares of the company were down $1.35 at $20.61.
The Vancouver-based diversified miner, which primarily mines coal, zinc and copper, reported adjusted first quarter earnings of C$1.16 per share and revenue of C$2.89 billion ($2.13 billion).
Both trailed analyst expectations for C$1.29 in earnings and C$3.04 billion in revenue, according to Thomson Reuters I/B/E/S.
Teck, which has been using cash flow and profit to cut debt, had debt of US$5.1 billion at the end of the quarter. Continued...