What to Watch for in Teck Resources’ 4Q16 Earnings Call



Teck Resources’ 4Q16 earnings call

Previously, we looked at analysts’ estimates for Teck Resources’ (TECK) (TCK) 4Q16 earnings. In this part, we’ll analyze the key updates that markets are waiting for in the company’s 4Q16 earnings call.

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Annual guidance

Teck Resources and other miners including BHP Billiton (BHP), Freeport-McMoRan (FCX), and Rio Tinto (RIO) generally provide annual production guidance. It will be crucial to watch Teck Resources’ fiscal 2017 production guidance, especially in the coal and zinc segments. Teck Resources is one of the major producers of both these commodities. Also, it will be interesting to hear the management’s views on future deleveraging opportunities. It’s worthwhile to note that Teck Resources managed to cut its debt levels last year on rising commodity prices. Furthermore, unlike some of the other miners like Freeport and Glencore (GLNCY), Teck Resources didn’t raise fresh equity and rather managed to cut its debt with a mix of organic cash flows and disposal of non-core assets.

Market outlook

During Teck Resources’ 4Q16 earnings call, markets will watch the management’s commentary on commodity markets, especially coking coal. The company is a major seaborne supplier of the steelmaking commodity. As noted previously, higher coal prices are expected to be the key driver of TECK’s 4Q16 performance.

However, coking coal prices have pared some of their gains as can be seen in the graph above. During their 4Q16 earnings call, analysts might look forward to some insight into coal markets from Teck Resources’ management.

Teck Resources has been among the best-performing diversified mining companies last year. In the next and final part of this series, we’ll see how analysts are rating the stock after its stellar run-up.


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