VANCOUVER, Oct 26 (Reuters) – Canada’s Teck Resources Ltd reported weaker-than-expected third-quarter earnings on Thursday and forecast softer prices for its coal in the fourth quarter, sending its shares tumbling more than 8 percent.
Teck, the world’s second-biggest exporter of steelmaking coal, said it expects a larger proportion of its coal sales in the fourth quarter to be non-premium coal, reducing its average realized price to about 85 percent of benchmark prices.
Teck’s realized prices are usually 90 percent to 95 percent of the benchmark, TD Securities analyst Greg Barnes said in a note to clients.
Vancouver-based Teck said it expected to return to a more traditional product mix going into 2018.
By midafternoon Thursday, Teck’s shares were down 8.4 percent at $20.95 on the New York Stock Exchange.
Teck expects total coal sales, including spot sales, of 6.5 million tonnes in the fourth quarter.
The company, which also mines copper and zinc, reported third-quarter adjusted profit of C$621 million, or C$1.08 per share, below analyst forecasts for C$1.19 a share, according Thomson Reuters I/B/E/S.
Earnings, which were nearly four times higher than at the same time a year ago, were boosted by higher coal and metal prices.
Teck sold 7.54 million tonnes of steelmaking coal in the third quarter, marginally above its sales forecast for between 7.2 million and 7.5 million tonnes.
Teck’s average third-quarter realized coal price was $159 a tonne, in line with the $158 to $163 a tonne it had forecast on Sept. 6.
($1 = 1.2803 Canadian dollars)
(Reporting by Nicole Mordant in Vancouver and Kanishka Singh in Bengaluru; Editing by Sunil Nair and Susan Thomas).