Teck Resources, the diversified Canadian miner, narrowly missed profit estimates early Wednesday, but boosted its dividend and set a share buyback to cap a record year. Teck stock fell modestly in Thursday stock market action, holding up somewhat better than the broad market.
Brazilian iron ore mining giant Vale is set to report after the close. Vale stock and Rio Tinto, a U.K.-based iron ore giant, both fell modestly.
Rio Tinto reported a record annual profit on Wednesday, while announcing a massive $10.40 per share dividend, including a $2.47 one-time payout.
Mining Stocks: Tech Earnings
Industrial metal mining stocks have been a relatively safe haven as investors balanced inflation and Russia risks. China has also been in focus, on signs that Beijing will move to restrain domestic iron ore prices. But Russia's overnight invasion of Ukraine, which is likely to weigh on global growth, could tilt the balance to the detriment of the group.
Teck gets about half its revenue from metallurgical coal, used to make coke, a key ingredient in blast-furnace steel and silicon production. The bulk of remaining revenue comes from coal and zinc. Teck announced Q4 production and sales volumes as well as 2022 guidance on Jan. 27. The company warned that heavy rains and mudslides in British Columbia had snared logistics in Q4, holding back sales. But Teck expects to make up those sales in the first half of 2022.
Teck said it remains on track to start copper production at its Quebrada Blanca phase-two copper project in Chile in the second half of 2022.
Teck's Q4 earnings surged 477% from a year ago to $2.02, missing the $2.04 consensus, according to Zacks Investment Research. Revenue jumped nearly 80% to $3.5 billion, also a miss. These figures are converted into U.S. dollars, though Teck reports in Canadian dollars.
Teck announced a share buyback of about $78 million, while declaring a one-time 50-cent dividend, on top of a boosted 12.5-cents quarterly dividend.
Teck Stock
Teck stock trimmed losses to close down 1.7% at 34.84. That still leaves Teck stock up about 20% this year and extended from a 30.01 buy point, according to MarketSmith.
Teck's relative strength line, the blue line in IBD charts that tracks its progress vs. the S&P 500, had been hitting multiyear highs through Wednesday.
Vale Earnings
Analysts expect Vale to post Q4 EPS of 80 cents, up 70% from a year ago, despite revenue falling 14% to $12.633 billion.
Vale, Rio Mining Stocks
Both Rio and Vale peaked last spring, then weakened sharply into November amid worries about the Chinese real estate market. Beijing's more recent emphasis on supporting growth turned the tide, as Chinese iron ore prices shot higher.
Vale stock has carved a 34-week cup-with-handle base with an 18.25 buy point. On Thursday, Vale sank 1.2% to 17.07, but well off session lows.
The cup is a deep one, with Vale dropping as much as 47%, a potential warning sign.
Keep in mind that the stock market backdrop is extremely negative at the moment. Be sure to read IBD's daily afternoon The Big Picture column to get the latest analysis of the market's prevailing trend and what it means for your trading decisions.
Rio fell fell 2.7% to 75.42 Thursday after pulling back close to its 50-day and 200-day lines.
Rio's 41-week cup-with-handle base carved a 34% decline from the peak. The more shallow consolidation might reflect Rio's progress in diversifying with copper and lithium projects. Rio stock is about 8% below an 80.54 handle buy point.
