Teck Resources Ltd. (TCK) is paying down and restructuring its short-term debt while posting solid revenue production.
Company Description
Teck Resources Ltd. operates as a diversified mining, mineral processing and metallurgical company. It owns or has interest in 15 operating mines in Canada, the United States, Chili and Peru and is involved in exploration activities in the Americas, Asia-Pacific, Europe and Africa. Teck Resources was founded in 1906 and has a market cap of $15.8 billion.
Shares of Teck Resources have been trending higher for the last 6 months, helped by the company’s solid second-quarter performance, reported on July 28.
Second-Quarter Results
Revenue was down less than 1% from last year to $1.7 billion, but net earnings came in strong, up $73 million to $570 million.
During the earnings release, Teck noted that it has a substantial cash balance of $750 million and had made huge strides in paying down a short-term loan related to its acquisition of Fording late last year, with the principal outstanding dropping close to $5 billion to $2.74 billion.
Cost Management
The company also noted that it expects to save $70 million in coal shipment costs in 2009 based upon rail-rate arbitration proceedings.
Estimates Up
After word of the good quarter hit the street, estimates ticked higher, with the current year adding 32 cents and advancing to $1.56 per share. The next-year estimate is pegged at $1.79, a 14% growth projection.
In spite of the recent run up in shares, this stock is still reasonably priced, trading at 17X projected current-year earnings, in line with the overall market.
The Chart
Shares of TCK are up huge over the last six months, bottoming out just above $2.50 in early March and recently topping off above $28. The MACD is also bullish, with the short-term moving average advancing above its longer-term counterpart. Take a look below.
