Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Southern Copper Blasts Through Obstacles

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Southern Copper (NYSE: SCCO  ) seems to have weathered the economic storm by posting an impressive 81.5% jump in third-quarter earnings on the back of good demand and production. Its future plans have also impressed me. Let's take a closer look.

Story behind numbers
Higher metal prices and copper sales helped Southern Copper register a 38% rise in revenue at $1.7 billion. Peer Newmont Mining (NYSE: NEM  ) also posted record growth in revenue even in the face of lower output from the year-ago period.

Like Newmont, Southern didn't let production disturbances derail its sales performance too much. Production was affected by factors such as labor unrest, adverse weather, and ore grade declines. Still, the overall production of Southern for the quarter increased compared with the year-ago period thanks to higher production at the Buena Vista mine. Three-quarters of the company's sales came from copper, which showed a healthy growth of 19% over the same period last year.

Supply issues seem to be pervasive, with even Freeport-McMoRan Copper and Gold (NYSE: FCX  ) , a competitor of Southern's, facing labor unrest in its Grasberg mine in Indonesia, where production was down by almost 15% since the beginning of the year.

Going ahead
For the long run, Southern looks to have placed its bets right. Its output is expected to increase significantly with most of its projects in different mines on track, including Buena Vista, La Caridad, Toquepala, Cuajone, and Tantahuatay. This takes care of the supply side. Meanwhile, demand for copper and two more metals Southern deals in -- silver and molybdenum-- is also expected to improve in 2012. With copper stocks of different companies decreasing, demand for it is expected to grow at 2% in key markets such as Asia. The demand for silver, another of Southern's products, is expected to go up not just for industrial purposes but also as a safe haven for investors in a wobbly economy.

Foolish takeaway
The market is promising to generate more demand for basic materials, and Southern Copper is geared up to deliver the goods by hiking production through the development of new projects. The stock is worth watching. To stay updated on Southern Copper and the metal industry, click here to add the stock to our watchlist service. It's free, and it helps you stay updated on news and analysis on your favorite companies.

Fool contributor Amitabha Chakraborty does not own shares of any of the companies mentioned in this article. The Motley Fool owns shares of Freeport-McMoRan. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (10)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1585191, ~/Articles/ArticleHandler.aspx, 10/20/2016 3:33:08 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,188.62 -14.00 -0.08%
S&P 500 2,142.88 -1.41 -0.07%
NASD 5,244.43 -1.98 -0.04%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/20/2016 3:17 PM
SCCO $27.67 Up +0.27 +0.97%
Southern Copper CAPS Rating: ****
FCX $10.26 Up +0.24 +2.35%
Freeport-McMoRan C… CAPS Rating: ****
NEM $36.91 Down -0.08 -0.20%
Newmont Mining CAPS Rating: ***