Molycorp (MCP) Drags Sector Lower on Surprise Q2 Loss; Keeping Eye on Japanese Supply Chains
Tweet Send to a FriendGet Alerts MCP Hot Sheet
Trade MCP Now!
Molycorp (NYSE: MCP) peers are on watch today following dismal second-quarter 2012 results from the rare earth giant, issued after the market closed Thursday.
Sales for Molycorp rose just 5 percent to $104.6 million, from $99.62 million in the same period last year.
Molycorp was also hit by the "quadfecta" of bad news: lower prices, lower volume, higher costs in both production and M&A. Taking all that into consideration, Molycorp posted a loss of 67.6 million, or 71 cents per share. Adjusting for one-time items, the loss was cut to three cents per share.
Overall, the Street was looking for sales of $115.6 million and earnings of eight cents per share.
The company will also spend the lions share of its CapEx allocation on Project Phoenix Phase 1 and Phase 2, with investment of $289 million expected for the rest of 2012, versus just $17 million for all other projects and expenditures.
On market dynamics: "The diversity of our vertical integration strategy is showing its value, as we have observed strengthening markets for certain downstream rare earth products, including bonded magnetic powders produced by Molycorp Magnequench, commented CEO Mark Smith. "On the whole, pricing of rare earth oxides have flattened, although the floor remains soft in certain Japanese supply chains. We believe that these supply chains will continue to de-stock over the second half of 2012. The longer-term supply and demand picture remains tight as Chinese regulations increase and the industry continues to consolidate within China. Molycorp remains well positioned to fulfill the demand gap as it brings reliable supply online from Project Phoenix."
Molycorp is over 17 percent lower ahead of the bell. Others on watch include Rare Earth Resources (AMEX: REE), Tasman Metals (AMEX: TAS), and Avalon Rare Metals (AMEX: AVL).
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
Sales for Molycorp rose just 5 percent to $104.6 million, from $99.62 million in the same period last year.
Molycorp was also hit by the "quadfecta" of bad news: lower prices, lower volume, higher costs in both production and M&A. Taking all that into consideration, Molycorp posted a loss of 67.6 million, or 71 cents per share. Adjusting for one-time items, the loss was cut to three cents per share.
Overall, the Street was looking for sales of $115.6 million and earnings of eight cents per share.
The company will also spend the lions share of its CapEx allocation on Project Phoenix Phase 1 and Phase 2, with investment of $289 million expected for the rest of 2012, versus just $17 million for all other projects and expenditures.
On market dynamics: "The diversity of our vertical integration strategy is showing its value, as we have observed strengthening markets for certain downstream rare earth products, including bonded magnetic powders produced by Molycorp Magnequench, commented CEO Mark Smith. "On the whole, pricing of rare earth oxides have flattened, although the floor remains soft in certain Japanese supply chains. We believe that these supply chains will continue to de-stock over the second half of 2012. The longer-term supply and demand picture remains tight as Chinese regulations increase and the industry continues to consolidate within China. Molycorp remains well positioned to fulfill the demand gap as it brings reliable supply online from Project Phoenix."
Molycorp is over 17 percent lower ahead of the bell. Others on watch include Rare Earth Resources (AMEX: REE), Tasman Metals (AMEX: TAS), and Avalon Rare Metals (AMEX: AVL).
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
You May Also Be Interested In
- salesforce.com, Inc. (CRM) Reports In-Line Q1 EPS; Issues In-Line Q2, FY14 Outlook
- Hewlett-Packard Company (HPQ) Tops Q2 EPS by 6c as Sales Slide 10%
- UPDATE: Intuit, Inc. (INTU) Tops Q3 EPS by 4c, Offers Guidance
Create E-mail Alert Related Categories
EarningsRelated Entities
Earnings
Login with Facebook
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
