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



Weaker Rare-Earth Metal Prices Widen Molycorp's Q3 Loss

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

Rare-earth metal miner Molycorp (NASDAQOTH: MCPIQ  ) offered some glimpses of sequential quarterly growth with its third-quarter earnings results, but competition within China depressed rare-earth prices, and disappointed investors yet again.

For the quarter, Molycorp delivered a 27.3% decline in revenue, to $149.1 million, compared to the previous year as the company sold 19% more metric tons of rare-earth metals, but at a lower price per kilogram of just $41.18. Last year, Molycorp reported a sale price per kilogram of $45.04.

Overall sales of $149.1 million are an improvement of 9% over the sequential quarter, if you're looking for a bright side, but price weakness in rare-earth metals and its resources segment hampered results. Rare-earth metal average selling prices declined by 23.5%, to $205.82 per kilogram, while its resource segment ASPs dropped by exactly 50%, to $12.51 per kilogram.

Net loss also ballooned higher, increasing to $72.8 million from just $21.7 million in losses in the year prior. This works out to an adjusted EPS loss of $0.43 compared to just $0.19 last year.

Molycorp did manage to rein in its expenditures, with total costs, excluding depreciation and amortization, falling to $150.4 million, from $183.2 million last year. This drop allowed Molycorp to reduce its cash flow burn rate to $16 million, from $34.7 million, in the sequential second quarter, but reduced its remaining cash and cash equivalents on hand to $173.9 million.

Looking ahead toward the fourth quarter, Molycorp estimates that capital expenditures will fall to approximately $60 million from the $69.9 million reported this quarter. With that assumption, cash outflow should shrink again depending on how rare-earth prices react during the quarter. 

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

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: 2718231, ~/Articles/ArticleHandler.aspx, 9/28/2016 10:36:50 AM

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 18,236.11 7.81 0.04%
S&P 500 2,159.87 -0.06 0.00%
NASD 5,304.49 -1.22 -0.02%

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

12/31/1969 7:00 PM
MCPIQ $0.00 Down +0.00 +0.00%
Molycorp, Inc. CAPS Rating: **