Molycorp Inc.’s third-quarter loss widened on a double-digit decline in revenue, though the rare-earth mining company also trimmed costs and saw some sequential improvement.
Beaten-down rare-earth prices have hindered Greenwood Village-based Molycorp’s ability to derive higher revenue, though the top line in recent quarters was bolstered by the company’s acquisition of Neo Material Technologies over a year ago. That deal turned Molycorp, which manufacturers and sells rare-earth products used in high-tech gadgets into a fully integrated mining-and-production firm.
Interim President and Chief Executive Constantine Karayannopoulos told The Wall Street Journal the company saw continuing improvements in the markets Molycorp serves as inventories across the industry’s supply chain are reduced. Molycorp’s customers and others in the rare-earth supply chain loaded up on materials when rare earth prices spiked sharply in 2011.
“We do see signs that the worst is behind us,” Karayannopoulos said.
One pocket of strength Molycorp touted was the magnetic materials and alloys segment. Volumes for that business jumped 20 percent sequentially, bolstered by rare-earth based magnetic powders, which are used in hard disk drives but also in home appliances and autos.
Typically, the magnetic powders industry’s improvement loads to a broader recovery, according to Karayannopoulos.
Overall, Molycorp reported a third-quarter loss of $69.9 million, or 43 cents a share, compared with a prior-year loss of $18.9 million, or 19 cents a share.
On an adjusted basis, which excludes stock-based compensation, inventory write-downs and other items, the adjusted loss widened to 27 cents from 5 cents. Revenue slid 27 percent to $149.1 million.
Analysts surveyed by Thomson Reuters expected a per-share loss of 28 cents on $161 million in revenue.
Molycorp sold 3,620 metric tons of product across all business segments during the quarter, down 18 percent from a year ago but rising 19 percent from the second quarter. Average selling price per kilogram totaled $41.18 in the latest quarter, down 8.6 percent from the prior quarter.
Costs, excluding depreciation and amortization, dropped 18 percent to $150.4 million.
The company had $173.9 million in cash and cash equivalents on hand as of Sept. 30. Molycorp expects to spend about $60 million in capital expenditures for the rest of the year.
Molycorp has had to raise capital to help finance cost overruns at the roughly $1.5 billion modernization and expansion project at Molycorp’s Mountain Pass facility in California.
