uploads/2017/07/part-2-ebitda-2-1.png

Teck Resources’ 2Q17 Earnings: What’s the Word on Wall Street?

By

Updated

Teck Resources’ 2Q17 earnings

Teck Resources (TECK), the Canada-based diversified miner (EWC), is scheduled to release its 2Q17 earnings on July 25. According to consensus estimates compiled by Thomson Reuters, Teck Resources is expected to post revenues of 2.8 billion Canadian dollars (~$2.2 billion) in 2Q17. The company posted revenues of 2.9 billion Canadian dollars (~$2.3 billion) in the sequential quarter.

Article continues below advertisement

Consensus estimates

Teck Resources is expected to post adjusted EBITDA of 1.29 billion Canadian dollars (~$1.0 billion) in 2Q17, down from 1.47 billion (~$1.17 billion) in the previous quarter. Notably, analysts have downwardly revised Teck Resources’ earnings estimates in the last couple of weeks. In Teck Resources’ Aggressive 2Q17 Earnings Estimates, we noted that the company’s earnings estimates looked to be on the higher side.

Metal prices

The sequential decline in Teck Resources’ 2Q17 earnings is hardly surprising. Coking coal (WLB), zinc, and copper (FCX) (SCCO) are the three key commodities that Teck Resources sells. Teck Resources has given a guidance of average realized coal prices of $160–$165 per metric ton for 2Q17. In comparison, the company reported average realized coal prices of $213 per metric ton in 1Q17. Copper prices also weakened in 2Q17 after a strong 1Q17. LME (London Metal Exchange) three-month copper contracts averaged $5,688 per metric ton in 2Q17 compared to $5,849 per metric ton in 1Q17. Zinc was no better, and prices averaged $2,596 per metric ton in 2Q17 compared to $2,780 per metric ton in 1Q17.

While Teck Resources’ final selling prices should depend on several factors, including the timing of sales, we can get an idea of the company’s 2Q17 average selling prices by looking at average metal prices.

In the next and final part of this series, we’ll see what analysts are recommending for Teck Resources’ stock.

Advertisement

More From Market Realist