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Saturday, May 28, 2022

Looking Closely at the Growth Curve for Teck Resources Limited (TECK)

Despite excellent sales growth in the previous quarter, mining firm Teck Resources Limited (NYSE: TECK) did not improve its full-year projection. Management is probably concerned that the surge in commodity prices is a one-time occurrence, and that inflationary pressures cannot always be countered by high pricing.

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Teck Resources, a Canadian copper, zinc, and coal miner, posted first-quarter 2022 earnings this week that beat Wall Street’s expectations. Revenues were slightly more than 5 billion Canadian dollars, almost double what they were a year ago.

The major driver of growth was the rise in raw material prices. Copper, for an instance, has increased in price by 17 percent year on year, zinc by 36 percent, and coal by 173 percent. Teck Resources was able to overcome greater costs, such as payroll, as well as inflationary pressures, thanks to higher pricing.

When compared to the first quarter of 2021, the company’s earnings improved by nearly five times: 2.96 Canadian dollars per share vs 0.61 Canadian dollars per share.

Despite the positive first-quarter performance, Teck Resources did not change its full-year outlook for 2022. This is a sensible attitude taken by management, which is concerned that the present high commodity prices will not last in the longer term.

TECK announced intentions to buy back more shares at the same time. Teck Resources also continues to invest in new projects, as seen by the recent opening of a new copper mining project.

Teck Resources Limited (TECK) closed Friday’s session at $39.46, up 1.47 percent. TECK shares have increased by 5.96 percent in the last week after rising by 88.16 percent in the previous 12 months.

The stock has risen 29.71 percent in the last three months but has lost 38.07 percent in the last six months. Furthermore, the company’s current market capitalization is $20.85 billion, with 535.80 million outstanding shares.

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