Molycorp Third Quarter Earnings Sneak Peek

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Molycorp Inc. (NYSE:MCP) will unveil its latest earnings on Thursday, November 8, 2012. Molycorp is a rare earth oxide producer in the Western Hemisphere. The company owns fully developed rare earth projects outside of China. It is a development stage company.

Molycorp Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of one cent per share, a decline of 98.5% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 5 cents. Between one and three months ago, the average estimate moved down. It has risen from a loss of 3 cents during the last month. For the year, analysts are projecting profit of 39 cents per share, a decline of 76.9% from last year.

Past Earnings Performance: Last quarter, the company fell short of estimates by 16 cents, coming in at net loss of 4 cents a share versus the estimate of net income of 12 cents a share. It was the fourth straight quarter of missing estimates.

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A Look Back: In the second quarter, the company swung to a loss of $67.6 million (71 cents a share) from a profit of $47.8 million (52 cents) a year earlier, missing analyst expectations. Revenue rose 5% to $104.6 million from $99.6 million.

Wall St. Revenue Expectations: Analysts predict a rise of 71.4% in revenue from the year-earlier quarter to $236.6 million.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.43 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 3.58 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased more than twofold to $637.6 million while assets rose 14.6% to $913 million.

Key Stats:

On the top line, the company is looking to build on three-straight revenue increases heading into this earnings announcement. Revenue increased more than sixfold in the fourth quarter of the last fiscal year and more than threefold in the first quarter before climbing again in the second quarter.

Stock Price Performance: Between August 9, 2012 and November 2, 2012, the stock price fell $3.09 (-23.9%), from $12.92 to $9.83. The stock price saw one of its best stretches over the last year between August 3, 2012 and August 9, 2012, when shares rose for five straight days, increasing 12.4% (+$1.43) over that span. It saw one of its worst periods between May 1, 2012 and May 9, 2012 when shares fell for seven straight days, dropping 10.5% (-$2.95) over that span.

Analyst Ratings: With three analysts rating the stock as a buy, one rating it as a sell and two rating it as a hold, there are indications of a bullish outlook.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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