Taseko Earnings: An Early Look

Earnings season is now starting to wind down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Taseko Mines (NYSEMKT: TGB  ) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Taseko has struggled in recent years as its mining projects haven't gone as well as investors had hoped. Will this quarter be the one in which the company begins its turnaround? Let's take an early look at what's been happening with Taseko over the past quarter and what we're likely to see in its quarterly report on Friday.

Stats on Taseko

Analyst EPS Estimate

($0.01)

Year-Ago EPS

$0.05

Revenue Estimate

$69.6 million

Change From Year-Ago Revenue

17%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

Can Taseko get moving in the right direction this quarter?
Analysts aren't too sure about Taseko's prospects. Over the past months, they've reversed what had been calls for a modest profit and flipped them to a loss for the quarter, meanwhile shaving $0.06 per share off the consensus figure for full-year 2013. The stock has risen 12% since mid-November but remains well below where it traded a year ago.

Taseko's main producing asset right now is its Gibraltar mine in British Columbia, which produces molybdenum and copper. With molybdenum being a key component of steel production, Taseko has suffered from weak steel demand, particularly in China. Moreover, cost pressures at Gibraltar look likely to continue for a while, making further margin compression likely. Meanwhile, copper has held up somewhat better, with prices down about a dime per pound over the past year.

Among its peers, most copper producers have posted advances, with both Southern Copper (NYSE: SCCO  ) and Rio Tinto (NYSE: RIO  ) seeing substantial gains during the quarter as global prospects for economic expansion begin to improve. Yet fellow molybdenum producer Thompson Creek Metals (NYSE: TC  ) has had an even tougher time and seen its shares fall quite a bit further than Taseko, even though peer General Moly (NYSEMKT: GMO  ) has held up reasonably well despite similar pressures with its Mount Hope mine.

One reason Taseko investors have to hope for improvement is its New Prosperity project, which could be the key to the company's future success. With indicated resources of 13.3 million ounces of gold and 5.3 billion pounds of copper, the company sees the project's value as worth five times Taseko's current market cap. Although the original Prosperity got rejected by Environment Canada, Taseko hopes that the revised project will address concerns and lead to a more favorable resolution.

Although figures in its quarterly report will be important, Taseko's main news will be any progress it makes on New Prosperity. That project has far more potential to make a major move to the stock price than Gibraltar does at this point.

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