What to Expect When Thompson Creek Metals Company Inc Reports Earnings This Week

Has Thompson Creek Metals Company Inc (TSX:TCM)(NYSE:TC) finally turned the corner?

The Motley Fool

Thompson Creek Metals Company Inc (TSX: TCM)(NYSE: TC) is scheduled to report its quarterly earnings on Tuesday. After years of losses, things are finally starting to look up for the troubled miner. With the ramp-up of the company’s Mt. Milligan copper and gold mine, the company is poised to return to profitability.

Let’s take a look at what has been happening at the company over the past quarter and what we’re likely to see in the upcoming report.

Stats on Thompson Creek Metals

Analysts’ EPS Estimate $0.10
Year-Ago EPS $0.08
Revenue Estimate $195.75M
Change From Year-Ago Revenue 66.20%
Earnings Beats in Past Four Quarters 2

Source: Yahoo! Finance

Has Thompson Creek Metals finally turned the corner?

Molybdenum has been one of the few bright spots of the resource sector over the past few months. Prices have soared more than 30% for the year to date as production cuts began to crimp supplies. As any armchair mining analyst could tell you, higher spot rates have had a positive impact on Thompson Creek’s bottom line.

In recent months, Bay Street has been ratcheting up its expectations of its earnings, going from a $0.03 per share loss for the second quarter to a current $0.10 per share profit. For the full year, the street is looking for the company to earn about $0.28 per share, more than double the consensus estimate only 60 days ago. However, in spite of the company’s improving fundamentals, the stock has been relatively tame, up a meager 7% over the past three months.

While Thompson Creek Metals is known for molybdenum, the company is transforming into a more diversified miner. The company’s second-quarter results showed the transition, as Mt. Milligan produced more than 29,700 dry tonnes of copper-gold-silver concentrate. With mining production expected to ramp up through the rest of the year and 2015, it should continue to post stellar earnings growth.

The key question for investors is how much Mt. Milligan will affect the company’s production mix. Given that the mine has 2.1 billion pounds of copper reserves and management has sold off streaming interests to more than 50% of its gold production, it’s evident that copper will drive the bulk of the company’s earnings in the near future. Eventually, Thompson Creek Metals is likely to join Molycorp Minerals Canada ULC (TSX: NEM)(NYSE: MCP) in having molybdenum make up only a small portion of its overall revenue stream.

In Thompson Creek’s upcoming report, watch for the miner to give its latest update on Mt. Milligan’s development and plans for further production increases. Investors will also want to get a sense for what management plans to do as payments from the mine’s production start rolling in. Shareholders should expect that executives will use the proceeds to pay down debt and shore up its balance sheet, but they may have other plans.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robert Baillieul has no position in any stocks mentioned.

More on Investing

Nuclear power station cooling tower
Metals and Mining Stocks

If You’d Invested $1,000 in Cameco Stock 5 Years Ago, This Is How Much You’d Have Now

Cameco (TSX:CCO) stock still looks undervalued, despite a 258% rally. Can the uranium miner deliver more capital gains to shareholders?

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

potted green plant grows up in arrow shape
Stocks for Beginners

3 Growth Stocks I’m Buying in April

These three growth stocks are up in the last year, and that is likely to continue on as we keep…

Read more »

clock time
Tech Stocks

Long-Term Investing: 3 Top Canadian Stocks You Can Buy for Under $20 a Share

These three under-$20 stocks offer excellent buying opportunities for long-term investors.

Read more »

Arrowings ascending on a chalkboard
Energy Stocks

Beat the TSX With This Cash-Gushing Dividend Stock

Canadian Natural Resources stock is well set up to beat the TSX as it continues to generate strong cash flows…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »

money cash dividends
Dividend Stocks

TFSA Dividend Stocks: Earn $1,200/Year Tax-Free

Canadian stocks like Fortis are a must-have in your portfolio to earn tax-free yields for decades.

Read more »