What’s in Store for Southern Copper (SCCO) in Q4 Earnings?

Southern Copper Corporation SCCO is likely to register a year-over-year decline in earnings in its fourth-quarter 2022 results next week. Lower production levels, and a drop in copper and silver prices, as well as inflated costs, are expected to have weighed on the performance.

Q3 Results

In the last reported quarter, the company’s earnings and sales declined year over year. While revenues missed the Zacks Consensus Estimate, earnings beat the same. Over the past four quarters, SCCO surpassed earnings estimates in two quarters and missed in the other two, resulting in a negative average surprise of 5.45%.

Q4 Estimates

The Zacks Consensus Estimate for SCCO’s fourth-quarter 2022 earnings per share is pegged at 82 cents, indicating a decline of 24% from the prior-year quarter’s reported figure. The estimate has moved up 4% over the past 30 days. The consensus mark for the quarter’s revenues stands at $2.53 billion, suggesting a year-over-year decline of 10.5%.

Southern Copper Corporation Price and EPS Surprise

 

Southern Copper Corporation Price and EPS Surprise

Southern Copper Corporation price-eps-surprise | Southern Copper Corporation Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Southern Copper this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.Earnings ESP: The Earnings ESP for Southern Copper is -1.83%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.Zacks Rank: Southern Copper currently sports a Zacks Rank of 1.

Key Factors

Copper accounts for more than 80% of the company’s sales. Over the past few quarters, SCCO has been witnessing lower production at its Peruvian mines due to lower ore grades. This trend is expected to have continued in 2022 and the fourth quarter was not an exception. Copper prices were on a downtrend throughout the fourth quarter, weighed down by uncertainties surrounding the global economy as new coronavirus restrictions in China affected the demand for the red metal, thus hurting prices. Prices were also impacted by the spike in energy costs and low global inventories.Silver prices have also been negatively impacted this year, weighed down by the stronger U.S. dollar, rising interest rates and sluggish growth. SCCO has also been facing higher costs for diesel and fuel, operating and repair materials, supplies, and energy, as well as higher labor costs.Overall, lower production levels, lower copper and silver prices, as well as elevated costs are expected to reflect on the company’s earnings in the to-be-reported quarter. Savings from the company’s stringent cost-control measures are likely to have negated some of the impacts.

Share Price Performance

 

Zacks Investment Research

Image Source: Zacks Investment Research

 

The company’s shares have gained 16.7% over the past year compared with the industry’s 37.1% growth.

Stocks to Consider

Here are some Basic Materials stocks, which, according to, our model, have the right combination of elements to post an earnings beat in their upcoming releases.Air Products and Chemicals APD, scheduled to release fourth quarter 2022 earnings on Feb 2, has an Earnings ESP of +2.67% and currently carries a Zacks Rank of 2.The Zacks Consensus Estimate for Air Products’ fourth-quarter earnings has been revised 0.4% upward in the past 60 days. The consensus estimate for APD’s earnings for the fourth quarter is pegged at $2.73.Teck Resources TECK, expected to release fourth-quarter earnings on Feb 23, has an Earnings ESP of +3.48%.The Zacks Consensus Estimate for Teck’s fourth-quarter earnings is pegged at 94 cents. TECK currently carries a Zacks Rank of 2.Albemarle ALB, scheduled to release fourth-quarter 2022 earnings on Feb 15, has an Earnings ESP of +7.16% and a Zacks Rank of 3.The Zacks Consensus Estimate for ALB’s fourth-quarter earnings has moved north 3% in the past 60 days. The consensus mark is pegged at $7.89.Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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