Teck shares up on earnings report

Teck Resources earnings more than doubled in the latest quarter helped by surging coal and copper prices, sending the Canadian mining company's shares up more than six per cent Tuesday.

Teck Resources earnings more than doubled in the latest quarter, helped by surging coal and copper prices, sending the Canadian mining company's shares up more than six per cent Tuesday.
The Vancouver-based coal, zinc and copper producer said late Monday that it earned $461 million, or 78 cents per share, during the first three months of 2011, down from $896 million, or $1.52 per share, during the same period last year.
But adjusted for one-time items, the company earned $450 million, or 76 cents per share, more than double the $198 million, or 34 cents per share, for the same time a year earlier.
Sales were $2.4 billion for the quarter, up from $1.9 billion for the same time a year earlier.
Analysts had expected an average of 76 cents a share, on revenue of $2.2 billion according to Thomson Reuters.
The company's shares were up $3.11, or 6.4 per cent, at $51.88 on the Toronto Stock Exchange in mid-afternoon activity.
The better-than-expected results came despite a number of headwinds for the company.
Unusually difficult winter weather conditions hampered rail and port operations, dropping first-quarter sales to 5.0 million tones, down from the average 5.3 million tonnes of sales in the first quarter of each of the last six years.
Coal production during the quarter was also affected by a two-month strike at its Elkview mine earlier this year that resulted in a loss of some one million tonnes. Production resumed on April 8 after a new labour pact was reached.
As a result, the company produced 75,000 tonnes of copper, 4.4 million tonnes of coal and 238,000 tonnes of zinc in the first quarter of 2011, compared with the 72,000 tonnes of copper, the 5.7 million tonnes of coal, and 231,000 tonnes of zinc for the same quarter a year earlier.
Teck's first-quarter coal sales of five million tonnes topped its most recent forecast range of 4.6 million tonnes to 4.9 million tonnes.

A truck is shown at Teck Resources Coal Mountain operation near Sparwood, B.C. The mining giant reported first-quarter results that beat analysts' expectations. (The Canadian Press)

The company also said it now sees 2011 coal sales to be between 23.5 million tonnes and 24.5 million tones, while annual copper sales are expected to be in the range of 330,000 to 340,000 tonnes. It also said it expects "minimal impact" on sales to Japan following last month's earthquake and tsunami.

Traders ballpark new gold ceiling

Gold has breached yet another psychological barrier in its steady march upward. But with all the hot money moving into silver, there are conflicting views about when it may reach the next one, even as confidence in the U.S. dollar continues to erode.
As the key gold futures contract temporarily passed US$1,500 an ounce Tuesday, traders quickly started eyeing the next round number. The thinking is that if investors get used to the idea of US$1,500, a rapid move up to US$1,600 could be made in short order. That view was supported by Standard & Poor’s decision to turn negative on its outlook for U.S. debt.
“It does seem that once you break through a particular level of resistance, it brings new money into the equation and allows continued strength in the gold price,” said Chuck Jeannes, president and chief executive of Goldcorp Inc.
But recent history suggests breaking through has not been that easy.
It took extended periods for gold to get through prior psychological levels like US$1,000 or US$1,200. In each case, it flirted with those highs for many months before finally pushing through.
“If people say US$1,500 is going to be the top, a lot of traders start filling their sell orders there and it becomes a self-fulfilling prophecy,” said Aaron Fennell, commodity futures specialist at ScotiaMcLeod.
“But I think in this case, traders aren’t looking at US$1,500 as the top of the market at all.”
But in trying to predict future performance, he pointed out a broader truth: that despite gold’s spectacular performance, there has been surprisingly little interest in it.
Over the last several months, it is silver, and not gold, that has captured the imagination of investors and gone on an amazing run. Since the start of October 2010, silver has climbed roughly 97%. Gold, by comparison, is up 14%.
“Gold has just grinded higher slowly. It hasn’t really had that much enthusiasm around it,” Mr. Fennell said.
It was the same story on Tuesday. While gold drew a lot of headlines for reaching a landmark price, the June contract ended the day below US$1,500 and up just 0.1% in total. By comparison, silver jumped another 2.2% to US$43.91, the highest closing price since the Hunt brothers tried to corner the market in 1980.
Looking back over the last decade, experts pointed out that gold has never had the kind of massive break-out that silver is experiencing now. Despite the general view that gold prices are “soaring”, the move upward has been quite orderly, with a new high being reached every year. Other commodities like nickel, uranium and potash have had much stronger upward (and downward) moves.
“That’s something I always point out to people who talk about gold being in a bubble. This has been a long-term move,” Mr. Jeannes said.
Given that fact, experts refuse to put too much emphasis on the move to US$1,500, and focusing on long-term fundamentals instead.
“It’s so sentiment-driven that you’ll just be pulling your hair trying to guess what it’s going to do next,” said Pawel Rajszel, an analyst at Veritas Investment Research who is more bearish than most of his peers.
Financial Post

Gold sends Canada stocks higher

Canadian stocks bounce back into the black; gold hits $1,500 mark

CHICAGO (MarketWatch) — Canadian gold miners helped lift the broader market into the black Tuesday as bullion futures advanced into record territory, hitting the key mark of $1,500 an ounce.
The S&P/TSX Composite Index   edged up 0.2%, or 28.9 points, to 13,731.3, swinging back into positive territory after a weak start incited by rising inflation worries.
Toronto’s main metals and mining index  advanced 1.8%, fueled by a 6% jump in shares of base-metals miner Teck Resources Limited . The Vancouver-based company on Monday reported better-than-expected revenue for the first quarter.

 

Also advancing, Canadian gold-mining giant Goldcorp Inc.’s   stock rose 0.5%. Gold for June delivery added $2.20, or 0.2%, to trade at $1,495.10 an ounce on the Comex division of the New York Mercantile Exchange. 

Canada’s energy sector also made a late-day comeback as oil futures turned higher after protests erupted in Nigeria, weakening the U.S. dollar. Toronto’s main energy index   rose 0.1%, adding to the broader market’s gains.
Leading the pack, Calgary-based Suncor Energy’s stock added 0.8%, offsetting declines in shares of Canadian Natural Resources Limited   and Connacher Oil and Gas Limited , which posted losses of 0.3% and 1.4%, respectively.
Concerns of rising inflation pressured Canadian stocks at the market’s open, after Statistics Canada reported a 3.3% rise in inflation in the 12 months to March. The climb puts the country’s year-over-year inflation increase at its highest since September 2008.
The Canadian dollar   strengthened against its U.S. counterpart, rising 0.8% from Monday’s close. In early April, the Canadian loonie reached its three-year best against the U.S. greenback. On Tuesday, one U.S. dollar purchased 95.5 Canadian cents, down from 96.4 cents at Monday’s close.
The jump in the country’s Consumer Price Index, which is used as a gauge of inflation, rose from 2.2% in the 12 months to February.
Among other notable movers, Toronto shares of Research In Motion Limited    fell 2.2%. The Ontario-based BlackBerry maker released its new PlayBook tablet computer on Tuesday