Rare-earth metal miner Molycorp (NYSE:MCP) 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.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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