Tech Cominco Feeling Affects of Lower Commodity Prices

It has been a rough couple of months in the copper and zinc markets. Since the start of the fourth quarter, zinc prices are down 14.3%, and copper prices are down 3.5%.

UBS analyst Brian MacArthur is slashing his earnings outlook on Teck Cominco Ltd. (TCK) to reflect the lower prices. He now expects Q4 earnings of C$.078 a share, which is well-down from his previous forecast of C$1.15 a share.

Of course, the numbers could get a whole lot worse if Teck writes down some of its Galore Creek investment in the fourth quarter. The company indicated last week that the writedown could come as soon as Q4, but it did not elaborate.

Mr. MacArthur's price target on Teck is C$51.00 a share, well above current levels. He values Teck's coal, base metal and gold operations at C$46.88 a share, and adds another C$4.03 a share for the oilsands unit.

Comments

[sliman]

Tons of value here. Look at the assests not just earnings.