Thompson Creek Metals Company Inc. TC is set to release third-quarter 2015 results before the opening bell on Nov 9.
In the last quarter, this mining company delivered a negative earnings surprise of 500%. Let’s see how things are shaping up for this announcement.
Factors to Consider
Thompson Creek, in mid-October, announced its production and sales results for third-quarter 2015. Total concentrate production for the Mount Milligan mine was 31.7 thousand dry tons, with 16.3 million pounds of payable copper and 53.8 thousand ounces of payable gold, marking an increase of 1% and a decline of 11%, respectively, on a year-over-year basis.
Daily mill throughput averaged 44,077 tons and mill availability averaged 90.2% for the quarter. Throughput was hampered during the third quarter as a result of SAG screen deck failures due to overloading and related recirculation issues, along with lower mill availability caused by scheduled and unscheduled mill shutdowns. Mill availability was affected by scheduled shutdowns to complete maintenance on the primary crusher, reline the ball mills, and carry out the annual inspection of the SAG mill motor.
Thompson Creek also stated that it would install a second SAG discharge screen deck in Oct 2015 to increase throughput without significant issues. The company thinks that these improvements, along with the continuation of secondary crushing of material from its temporary crushing facility, will lead to an improvement in throughput in November and December.
In addition to the continued ramp-up of production at Mount Milligan, Thompson Creek remains focused on strengthening its balance sheet and reducing debt. The company notified that since the completion of the Mount Milligan mine in June, it has repaid around $121 million or 12% of its debt balance.
Further, Thompson Creek expects its molybdenum business to generate positive cash flow of about $20−$21 million in 2015, including the accrued payments of roughly $7 million at the Endako mine.
Earnings Whispers
Our proven model shows that Thompson Creek is likely to beat earnings because it has the right combination of the two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +100.00%. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise.
Zacks Rank: Thompson Creek currently carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1, 2 or 3 have a significantly higher chance of beating earnings. Conversely, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.
Thompson Creek’s Zacks Rank #3 and positive ESP make us reasonably confident of an earnings beat.
Stocks That Warrant a Look
Here are some companies in the basic materials sector you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Ryerson Holding Corp. RYI has an Earnings ESP of +44.44% and a Zacks Rank #3.
Pan American Silver Corp. PAAS has an Earnings ESP of +27.27% and a Zacks Rank #3.
Franco-Nevada Corp. FNV has an Earnings ESP of +7.69% and a Zacks Rank #3.
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