Teck Resources (TCK) Stock Falls After Suspending Copper Cathode Production Near Chilean Plant

NEW YORK (TheStreet) -- Teck Resources (TCK) shares are down 2.66% to $10.39 in market trading on Friday after the natural resource miner suspended production at its Quebrada Blanca plant in Chile after ground movement was detected near the site.

The company has suspended production indefinitely and did not provide a timetable for the resumption of activities at the plant, although mining activities not associated with the plant are continuing.

The company said that it expects the investigation into the cause of the ground movement to take at least a week.

TheStreet Ratings team rates TECK RESOURCES LTD as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TECK RESOURCES LTD (TCK) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and feeble growth in the company's earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The current debt-to-equity ratio, 0.49, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.39, which illustrates the ability to avoid short-term cash problems.
  • Despite the weak revenue results, TCK has outperformed against the industry average of 17.3%. Since the same quarter one year prior, revenues slightly dropped by 2.9%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
  • The gross profit margin for TECK RESOURCES LTD is currently lower than what is desirable, coming in at 33.84%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.35% trails that of the industry average.
  • Net operating cash flow has decreased to $372.00 million or 31.74% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • You can view the full analysis from the report here: TCK Ratings Report

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