(Reuters) - Diversified miner Teck Resources Ltd TCKb.TO TCK.N reported a 13 percent rise in quarterly operating profit on Tuesday on strong coal pricing and volumes, though earnings fell short of some expectations as copper, zinc and lead prices dropped.
Vancouver-based Teck said its coal segment had benefited from investments in new mining equipment and plant upgrades, which helped boost output by 43 percent in the quarter and spread out the burden of fixed costs during the period.
Teck, one of the world’s top producers of metallurgical coal, used in the production of steel, said coal pricing in the first quarter was stronger than it was a year earlier even though coal markets have weakened over the last nine months,.
Looking ahead, the company struck a note of caution, saying markets for its commodities remained volatile largely due to uncertainty over economic conditions in Europe.
Widespread concerns about Europe’s sovereign debt crisis and slowing growth in China have weighed heavily on investors in recent months and led to a pullback in shares of mining companies. The Dow Jones Titans Basic Resources Index .DJTBAS, which reflects the share prices of the world’s top miners, has fallen some 30 percent over the last 12 months.
Teck’s Toronto-listed shares, which have fallen 34 percent during that period, closed on Monday at C$35.33.
Teck’s first-quarter operating profit, which excludes tax provisions, interest expenses and other items, rose to C$941 million from C$832 million a year earlier.
Excluding an after-tax charge for refinancing some of its debt and other smaller one-time items, profit rose to C$504 million, or 86 Canadian cents a share, from C$450 million, or 76 Canadian cents a share.
That was just shy of the average analyst forecast of 88 Canadian cents a share, according to Thomson Reuters I/B/E/S.
Net profit attributable to shareholders fell to C$218 million, or 37 Canadian cents a share, from C$461 million, or 78 Canadian cents a share.
Quarterly revenue rose 7.7 percent to C$2.55 billion on the back of stronger coal prices and higher zinc, copper and coal sales volumes.
While average coal prices were 8 percent higher than those in the year-earlier period, average copper and zinc prices fell 14 percent and 16 percent, respectively.
Reporting by Euan Rocha in Toronto; Editing by Frank McGurty