UPDATE 4-Teck shares drop on cost, copper output forecast
(Recasts after conference call, adds new analyst comment)
By Euan Rocha and Nicole Mordant
TORONTO/VANCOUVER Feb 13 (Reuters) - Shares in Teck Resources Ltd slumped nearly 7 percent on Thursday after earnings from Canada's biggest diversified miner fell below market expectations and its cost outlook for producing coal this year was steeper than expected.
Teck also said that its copper production would continue to fall for the next couple of years. As a result, it is interested in buying either a copper project or mine although asset prices remained high, its chief executive said.
"Yes, we would be interested in adding to our copper portfolio," Teck CEO Don Lindsay said on a conference call to discuss the company's fourth-quarter results.
However, he added that as Teck was a producer of several commodities, it could also buy assets other than copper. The Vancouver-based company is in a strong cash position to make an acquisition, with some C$2.5 billion ($2.28 billion) on hand.
Hurt by lower commodity prices, Teck's earnings excluding one-off items fell 44 percent to C$227 million, or 40 Canadian cents a share, in the fourth quarter. Analysts, on average, had expected Teck to earn 44 Canadian cents a share, according to Thomson Reuters I/B/E/S.
While Teck achieved a number of milestones during the quarter, including more than C$500 million of cost reductions, JP Morgan's team of mining analysts said they expected investors "will largely look through these achievements and focus on the significant drop in expected 2014 copper production combined with rising coal costs".
Shares in Teck, which have fallen roughly 18 percent in the past year, were down 6.6 percent at C$26.01 on the Toronto Stock Exchange. Continued...