Teck Resources Q1 Profit Falls - Quick Facts

(RTTNews) - Teck Resources Ltd.(TCK, TCK_A.TO, TCK_B.TO) said that its profit attributable to shareholders for the first quarter of 2014 fell to C$69 million, or C$0.12 per share, from C$319 million or C$0.55 per share in the same period last year.

Adjusted profit, excluding the effect of tax adjustments and asset provisions of C$21 million and C$8 million, respectively, declined to C$105 million, or C$0.18 per share, from C$328 million, or C$0.56 per share, a year ago. Analysts polled by Thomson Reuters expected the company to report earnings of C$0.24 per share for the quarter. Analysts' estimates typically exclude special items.

The decline in adjusted profit was primarily due to lower commodity prices, especially for coal. A decline in copper prices late in the quarter also resulted in negative pricing adjustments of C$41 million on an after-tax basis, and it incurred a C$20 million after-tax charge for coal inventory write-downs. Partly offsetting the lower coal and copper prices was the positive effect of the stronger U.S. dollar.

Revenues for the quarter declined to C$2.084 billion from last year's C$2.330 billion. Fourteen analysts estimated revenues of C$2.10 billion for the quarter.

The company said its cost reduction program has exceeded its initial goals, with C$345million of annualized reductions realized to date. It is targeting a further C$200 million of annualized cost reductions and C$150 million of capital expenditure reductions.

The company noted that it is reducing its sustaining and development capital expenditures by approximately C$150 million from the deferral of equipment purchases and reduced spending on certain development projects and are planning to restart the Pend Oreille zinc mine at a cost of approximately C$45 million. As a result, its previously disclosed 2014 capital expenditure forecast has been reduced by approximately C$105 million from C$1.9 billion to C$1.8 billion.

The company also expect to spend C$700 million on capitalized stripping preparing mining areas for future production, which is unchanged from its previous guidance. In addition, it is deferring the potential restart of the Quintette steelmaking coal mine until coal market conditions improve.