Commodities & Metals

What to Expect From Molycorp Earnings

Molycorp Mountain Pass Mine
Source: Molycorp Inc.
Molycorp Inc. (NYSE: MCP) will report its fourth-quarter financial results Monday after the markets close. Thomson Reuters has recent consensus estimates for a net loss of $0.33 per share and $104 million in revenue. This rare earth minerals company hopes that it can turn it around this year and that it will not be like the same quarter from the previous year with a net loss of $0.28 per share and $123.81 million in revenue.

In the middle of February, 24/7 Wall St. asked if Molycorp was really back, after its shares more than doubled from the beginning of that month. Investors were pretty enthusiastic at that point, hoping that the cult stock could get past the New York Stock Exchange’s $1 rule.

At this time, positive news on what Molycorp would report for the fourth quarter came to light. A report surfaced that Molycorp’s Mountain Pass California facility increased its rare earth production in the fourth quarter to nearly double the previous quarter. Mountain Pass produced 1,328 metric tons (MT) of rare earth oxide equivalent production, compared to 1,034 MT in the previous year. The full year production for 2014 was 4,785 MT, compared to 3,473 MT in 2013.

It did not take long for this news to drive shares up above the $1 mark, as well as actually close above it on February 17, for the first time since November. However, since that date shares have not closed over the $1 mark.

This earnings report could potentially make or break Molycorp’s efforts to escape delisting by the NYSE, but either way this company has to build some more momentum, otherwise it will be left in the dust.

The 50-day moving average (MA) reads at $0.70 and is currently being tested by shares. The last time the MA was tested in early February, shares skyrocketed above it, at least briefly. We are at another inflection point for the stock, but these earnings will be the deciding factor for which direction shares go from here.

Shares of Molycorp were down about 2% at $0.70 in the second half of Monday’s trading session. The stock has a consensus analyst price target of $1.85 and a 52-week trading range of $0.28 to $5.22.

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