Teck Resources profit climbs; shares surge
By Euan Rocha
TORONTO (Reuters) - Quarterly profit at Teck Resources TCKb.TO more than doubled due to a strong performance at its coal and copper businesses, the diversified miner said on Thursday, but it showed caution about global economic conditions and lowered some forecasts.
Investments in new equipment, plant upgrades and employees resulted in substantial increases in coal output, the Vancouver-based company said, while investments in Chile and Peru helped boost copper output.
Even so, Teck lowered its 2011 coal sales forecast because of economic conditions and trimmed its 2011 copper production forecast due to weather-related problems.
Despite the more cautious outlook, Teck's shares rose more than 7 percent on Thursday morning in New York and Toronto, helped in part by the 33 percent dividend increase it announced late on Wednesday.
"Near-term economic concerns have pressured all the coal stocks, including Teck, so Teck's more cautious outlook may be priced into the stock," wrote BMO Capital Markets analyst Meredith Bandy, in a research note.
The gain in Teck's share price reflected similar gains in the shares of larger rivals BHP Billiton (BLT.L: Quote), Rio Tinto (RIO.L: Quote) and Xstrata XTA.L. Stocks of diversified miners surged on Thursday after euro zone leaders struck a last-minute deal to contain the currency bloc's debt crisis.
"If anything the revised guidance that Teck issued, in concert with its third-quarter numbers, was fairly negative," said Morningstar analyst Dan Rohr. "You've got the strong macro development and the decidedly negative fundamental outlook, and the macro won this time."
Teck's New York-listed shares were up 8.7 percent at $40.25 at 11.15 a.m. EDT, while its Toronto-listed shares were up 7.2 percent at C$40.01. Continued...