UPDATE 2-Miner Teck beats expectations, eyes further coal cutbacks
(Adds analyst comments, recasts with better-than-expected profit)
July 23 (Reuters) - Canadian miner Teck Resources Ltd reported a better-than-expected quarterly profit on Thursday, reflecting higher metals sales and lower costs, but said coal output could need further cutbacks if grim market conditions continue.
The company, the largest producer of steel-making coal in North America, has begun rotating shutdowns at six Canadian coal mines and said it may take further actions in the fourth quarter if the supply-demand balance does not improve.
That move will reduce Teck's third-quarter coal production by about 1.5 million tonnes to 5.7 million tonnes, with sales seen in the range of 6 million to 6.5 million tonnes.
Hurt by a slowdown in Chinese demand and a glut of new supply from Australia, Teck forecasts annual coal production of 25 million to 26 million tonnes.
With prices for all its major commodities down significantly, the company said it is focusing on cost cutting and disciplined use of capital.
Vancouver-based Teck reported adjusted earnings of 14 Canadian cents per share, above analysts' average estimate of 11 Canadian cents, according to Thomson Reuters I/B/E/S.
"Results were above expectations, primarily due to stronger coal, copper, and zinc sales than expected," said RBC Capital Markets analyst Fraser Phillips in a note to clients. "Operating results were solid in each segment."
Revenue of C$2 billion ($1.54 billion) was in line with estimates. Continued...