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Why Taseko Mines Ltd's Shares Plunged 18% Today

By Travis Hoium - Feb 22, 2018 at 1:41PM

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A weak bottom line in the fourth quarter didn't leave investors with a good feeling about Taseko's operations.

What happened

Shares of Taseko Mines Ltd (TGB -0.62%) plunged as much as 17.6% in trading Thursday after reporting fourth-quarter 2017 results. Shares recovered slightly as the day went on but were down 10.4% as of 12:20 p.m EST.

So what

Operations are improving, but investors are disappointed with the profits being posted by Taseko. Revenue was up slightly in the fourth quarter to $95.4 million and adjusted net loss was $1.5 million, or a penny per share. Revenue topped the $88.3 million analysts were expecting, but earnings fell well short of the $0.08 estimate.

A wide-angle view of a working open pit mine.

Image source: Getty Images.

Wildfires in British Columbia have impacted operations since last summer and are delaying operations into 2018. If there's a broad disappointment investors are seeing on Thursday, it's those delays impacting operations.

Now what

Until Taseko proves it can live up to operational plans, I don't see a reason to buy the stock -- despite a falling share price. Earnings estimates for 2018 of $0.35 from Wall Street are probably going to be on the high end of what's possible and losses could even extend to early in the year. Revenue is a strong point, but if money isn't flowing to the bottom line, it leaves a lot to be desired for investors. 

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