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Investing.com -- Aurubis AG (ETR:NAFG) shares rose 3% on Tuesday after the German copper producer reported third-quarter earnings that exceeded expectations and narrowed its full-year profit guidance.
The company posted operating earnings before taxes of €57 million for the fiscal third quarter, 10% above consensus and 16% higher than Morgan Stanley’s estimate of €49 million to €52 million.
The quarterly result was supported by a strong performance in the Custom Smelting & Products division, which generated €99 million in EBT.
That offset a €15 million loss in the Multimetal Recycling unit, which was affected by lower availability of input materials and depreciation related to an at-equity investment.
Net cash flow before capital expenditures and interest was €167 million, ahead of the forecast of €89 million. Free cash flow after capital expenditures and interest was reported at -€58 million, which was also above expectations. The company ended the quarter with net debt of €337 million and a net debt-to-EBITDA ratio of 0.6x.
Revenue for the quarter totaled €4.62 billion, down 7% from a year earlier and 2% lower than the prior quarter.
EBT declined 38% year over year and 43% from the second quarter. Earnings per share fell to €0.94 from €1.74 in the previous quarter.
Aurubis narrowed its full-year EBT guidance to a range of €330 million to €370 million, compared with a previous range of €330 million to €400 million.
The company said it expects full-year EBT to come in near the middle of the new range. The revised guidance aligns with consensus estimates of €352 million to €361 million.
The company lowered its EBT forecast for the Multimetal Recycling division to €50 million to €70 million from €50 million to €110 million.
At the same time, it raised the upper end of its guidance for Custom Smelting & Products to €370 million from €310 million to €370 million.
It maintained the range for eliminations and other items at a loss of €60 million to €70 million.
Aurubis said higher earnings from sulfuric acid, an increased metal result and a stronger contribution from its products business are expected in the fourth quarter. It reaffirmed its net cash flow guidance of €500 million to €600 million for the fiscal year.
Production volumes were mostly lower compared with the previous quarter. Concentrate throughput fell to 392 kilotons from 594 kilotons in the second quarter.
Sulfuric acid output dropped to 353 kilotons from 554 kilotons. Wire rod and flat rolled output increased slightly, while cathode and shapes output declined.
Gross profit for the quarter was €382 million, and EBITDA reached €121 million, both lower than the previous quarter. EBT under IFRS standards came in at €107 million, down 50% quarter over quarter.