When a company that earns more than a few pennies per share reports more than doubling its earnings year over year, you'd expect to hear cheers erupt on Wall Street, right? So why is it that, just days after reporting a 46% rise in sales -- and profits that leapt 168% year over year -- ADRs (each of which bundles up three common shares) of Russian mining magnate Mechel (NYSE:MTL) are up just 2.6%? Let's find out.

Long view
Part of the answer may be found by examining Mechel's performance over the past nine months, as opposed to viewing its Q3 performance in isolation. Year to date, revenues are only up 8%, and profits 18% -- good, but not fasten-your-seatbelts good. According to COO Alexey Ivanushkin, the year-to-date numbers are explained by the company's weak Q1; Q3 acted more to offset Q1's weakness than to add heaping piles of cash to the company's profits for the year.

Trends in the pricing of Mechel's primary mining products gave investors further cause for caution. Although prices rose strongly for iron ore and nickel (up 33% and 83%, respectively), iron ore accounts for just 13% of the combined weight of the raw materials Mechel digs out of the earth. And nickel in particular, although a real moneymaker for Mechel this quarter, accounts for a mere 10,530 tons out of the 28.5 million tons of raw materials that it shipped this year. Unfortunately, the various forms of coal that are the company's primary (87%) mining product saw their prices drop in Q3; coking coal declined 1% in price, and steam coal was down 18%.

On the steel side of the business, things looked a bit brighter. Mechel primarily produces two types of steel products: rebar and "semi-finished" steel. Pricing on both appears to be growing, but the company was a bit opaque in how it described the growth -- comparing it not to Q3 2005 levels (as it did with raw materials), but to Q1 and Q2 2006, respectively.

Ivanushkin had this to say about next quarter's results: "We are now confident that our performance over the full year will show substantial improvement over last year's levels, as consolidated net profit for the nine months is already close to the result of the whole last year." Good to know.

Who is Mechel?
Because we're still getting to know Mechel here, I want to add one final note for those who want to pigeonhole the company as "miner" or "steelmaker." According to the press release, roughly 31% of Mechel's business is digging up raw materials and selling them as-is to external buyers. The other 69% is smelting its own raw materials into steel, then selling that as a value-added product. On balance, therefore, Mechel is more of a miner by volume, but a steelmaker by value, of products shipped. Just a word to the Foolish.

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Fool contributor Rich Smith does not own shares of any company named above. The Fool's disclosure policy will help you strike gold.