VANCOUVER, British Columbia (
reported record quarterly earnings of $908 million, or $1.54 a share, for the first quarter of 2010, exceeding the consensus estimate of analysts polled by
of 74 cents.
The earnings mark a significant improvement over profit of 47 cents and 70 cents a share reported for the first and last quarters of 2009, respectively. The company reported earnings before interest, taxes, depreciation and amortization of $1.5 billion on record revenue of $1.9 billion. Excluding asset sale gains, comparative net earnings for the first quarter of 2010 stood at $205 million, or 35 cents a share, similar with earnings of $214 million a year earlier.
The company's stock, which closed at $41.73 Tuesday, rose more than 3% in after-hours trading. The stock is currently trading at an attractive price-to-earnings ratio of 10.90. In comparison, mining giants
are trading at P/E ratios of 11.43, 20.56, 17.79, and 24.11, respectively.
Other mining giants,
Freeport-McMoRan Copper & Gold
are trading at relatively more attractive P/E ratios of 10.09 and 10.04, respectively.
Teck Resources has seven buy, two hold, and no sell ratings, according to
Analyst ratings guide.
Teck Resources benefited from higher copper prices, which averaged $3.27 a pound during the first quarter of 2010 compared with $1.56 a pound in the same period a year ago. Zinc prices averaged $1.04 a pound during the quarter, up 96%. On the other hand, realized average prices for coal were down 31% to $140 a ton.
During the quarter, the company sold a number of non-core assets including a one-third interest in the Waneta Dam, an interest in future gold production from Carmen de Andacollo, and certain Turkish gold properties for total proceeds of $1.1 billion. On Monday, the company retired $9.8 billion debt related to the acquisition of Fording Canadian Coal Trust completed during 2008.
The asset sales, coupled with the debt repayment, during the quarter improved the company's balance sheet. Earlier this month, both Standard & Poor's and Fitch Ratings upgraded Teck Resources to "investment" grade.
"Our ongoing operations continue to produce strong results," said President and CEO Don Lindsay. He added, "The remainder of the year is also expected to see the benefit of increased copper production from the Andacollo concentrate project, which is the first in our pipeline of copper expansion projects."
The company anticipates lower operating costs of $55 a ton for coal to be reflected in its second-quarter results, since the first quarter factored in the older and higher cost coal that included a large proportion of coal from higher-cost mines.