Molycorp (MCP) CEO Discusses Earnings 'Miss' on ElementallyGREEN Blog

Following a more than 13 percent decline on Friday on the heels of Q3 results, Molycorp's (NYSE: MCP) President and CEO Mark Smith has responding on the company's ElementallyGREEN Blog.

The exec pointed to several events which may have pushed Molycorp's latest quarter into the "miss" realm:

• Consensus earnings estimates - "Until about two weeks before we issued our 3Q earnings statement, Wall Street's consensus earnings estimate for Molycorp was $0.65 per share for the quarter. However, at that time, one of the financial institutions that follows us replaced its analyst. That new analyst revised the firm's EPS estimate from $0.60 to $0.84 per share. This single change in one analyst's estimate caused our consensus EPS number to rise to $0.70 per share. That resulted in Molycorp's missing the consensus estimate by $0.03 per share versus exceeding consensus by $0.02 per share, on an adjusted basis."
  
• Consensus revenue estimates - "The consensus estimate for Molycorp's Q3 revenue was $160.7 million, and a few commentators suggested Molycorp missed the consensus revenue estimate as well. Our GAAP revenue for 3Q was $138.1 million; however, we also had inter-company sales of $37.2 million to our Sillamae, Estonia and Tolleson, Arizona facility. This resulted in total shipments valued at approximately $175 million, but inter-company sales cannot be recognized as revenue under U.S. GAAP."
  
• Revised production guidance - "During the 3Q earnings call, we also slightly lowered our production forecast for the fourth quarter. The slightly lower forecast is the result of accelerating Project Phoenix, and little to nothing else. The fact that we are accelerating Project Phoenix requires us to take certain planned shutdowns for the purpose of tying the new facilities into existing infrastructure on site. These shutdowns would be required regardless and, before the announced accelerated Project Phoenix, these same shutdowns would have been required in the first and/or second quarters of 2012. However, overall, the total production from our current commercial demonstration plant is not expected to change, other than this minor timing issue."
  
• Production of separated heavy rare earths - "Some commentators have suggested recently we are not being as forthright as we should be about the ability to produce heavies at Mountain Pass. It is not clear how this whole issue became such an important matter and I certainly apologize for any confusion people in our company may have caused who stated things they were not in a position to talk about, due to a lack of knowledge. For the record, the senior official at Molycorp who was cited recently is not working on Project Phoenix. It is unclear to me why the commentators who wrote on this subject did not simply call me or others in the company who are much more familiar with the project, including on questions of timing and budget."

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