Teck Resources Ltd., Canada’s largest diversified miner, reported third-quarter profit that beat analysts’ estimates as coal sales rose and costs fell.
Net income increased to C$267 million ($256 million), or 46 cents a share, from C$256 million, or 44 cents, a year earlier, the Vancouver-based company said today in a statement. Profit excluding tax charges and other one-time items was 44 cents a share, surpassing the 38-cent average of 26 estimates compiled by Bloomberg. Sales rose 0.7 percent to C$2.52 billion, more than the C$2.27 billion average estimate.
Teck’s coal sales climbed 36 percent from a year earlier to 7.57 million metric tons in the third quarter, while mine operating costs fell 14 percent to C$50 a ton.
“The most significant contributor to the EPS beat comes from the coal business,” Greg Barnes, a Toronto-based analyst at Toronto-Dominion Bank, said today in a note. Coal sales beat TD’s estimate of 6.6 million tons and mine-site operating costs were better than the bank’s $58 a ton projection, Barnes said.
China imported about 2 million tons of metallurgical coal, a steelmaking ingredient, from Canada in the first two months of the quarter, more than double the year-earlier period, according to the latest figures published by the Canadian government.
Teck rose 3.8 percent to C$30.54 at the close in Toronto. The shares have declined 16 percent this year.
Coal accounted for 45 percent of Teck’s revenue in 2012, according to data compiled by Bloomberg. The company also mines copper, which represented 30 percent of sales, and zinc, which made up 25 percent.
“Results were above expectations with solid operating results in coal, copper and zinc,” Fraser Phillips, a Toronto-based analyst at Royal Bank of Canada, said today in a note to clients. “Both copper sales volumes and coal sales volumes were above our expectations.”