Molycorp Inc. (NYSE: MCP) reported late Tuesday that its first quarter net loss narrowed to $909,000, or 3 cents a share, compared with a loss of $7.7 million, or 16 cents a share, in the year earlier quarter. On an adjusted basis, the company earned 1 cent per share in the latest quarter. Revenue surged to $26.3 million, an increase of 21% sequentially and 770% year over year. Analysts, on average, expected the company to post earnings of 10 cents per share on revenue of $41.68 million.
"We were very pleased to see both sales volume and revenue increase for Molycorp in the first quarter of 2011, as this quarter is typically characterized by slow buying and depressed activity in China due to its New Year celebrations," said Mark Smith, Molycorp President and Chief Executive Officer. "In spite of this, and in spite of the natural catastrophes experienced by Japan in the first quarter, we continued to see strong global demand for our products. Market prices of REOs rose significantly in the first quarter, helping to boost our price realizations."
For the remainder of 2011 and for the foreseeable future, the Company anticipates that the Chinese government will follow through on its announced intent to continue to limit the quantity of rare earth oxides available outside of China. Independent estimates of China's full-year 2011 rare earth export quotas predict that these will be set by China's government below 30,000 metric tons, which compares to a total global demand outside of China of between 55,000 to 60,000 metric tons. This trend should create opportunities for the Company to increase sales volumes and improve pricing terms for its products. The recent earthquake and tsunami in Japan may have a short-term negative impact on market demand in the second and third quarters. The Company expects that demand should fully recover by the fourth quarter.
Shares of the company slumped more than 4% in after-hours trading.
