This year has been quite challenging for metals miners with
declining demand for metals and rising inventories. And
disappointing results have in turn led to downward estimates
Hudbay Minerals (
to a Zacks Rank # 5 (Strong Sell).
About the Company
Headquartered in Toronto, Canada, Hudbay is an integrated mining
company with operations, development properties and exploration
activities across the Americas, principally focused on base and
precious metals, including copper, zinc, gold and silver.
Disappointing Quarterly Results
On July 31
, Hudbay reported its second quarter results. The quarter
resulted in a loss of $52.7 million or $0.31 per share,
compared with a loss of $29.6 million or $0.17 per
share in the second quarter of 2012.
Total revenue for the quarter was $130.7 million, down
$59.2 million from the same quarter a year ago. This decrease
was primarily due to lower sales volumes (mainly resulting from
some mine closures) and lower metals prices.
The company reduced its semi-annual dividend
to $0.01 per share, down from $0.10 per share,
declared in March.
Downwards Estimates Revisions
Due to disappointing results, quarterly and annual estimates
have been revised sharply downwards in the past few weeks.
Zacks consensus estimate for the current quarter now stands at a
negative $0.01 per share versus a positive $0.02 per share, 30 days
ago, while the full-year consensus estimate is now for a loss of
$0.04 per share, down from earnings of $0.06 per share.
The Bottom Line
While the company is trying to grow production and reduce costs,
lower metals prices resulting from high inventories and global
slow-down continue to act as headwinds.
HBM is currently a Zacks Rank # 5 (Strong Sell) stock and it has
a longer-term recommendation of "Underperform". Further, the Zacks
Industry rank of 250 out of 265 indicates weakness in the near to
mid-term. Thus we think investors should avoid this stock for
the time being.
Investors looking for exposure to the beaten-down mining
industry could look at Avalon Rare Metals (AVL)-a Zacks Rank #1
(Strong Buy) stock with an 'Outperform' recommendation.
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HUDBAY MINERALS (HBM): Free Stock Analysis
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