Teck Resources Ltd (USA) (TCK): How It Could Bounce Back From Gold’s Plunge

On Tuesday, Teck Resources Ltd (USA) (NYSE:TCK) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

This past week, gold prices plunged, sending mining stocks throughout the industry into a free-fall. Even though Teck Resources Ltd (USA) (NYSE:TCK) primarily mines coal and industrial metals like copper, lead, molybdenum, and zinc, its stock has dropped as investors question whether demand for commodities will survive slowing growth rates in former hotbeds of economic strength. Let’s take an early look at what’s been happening with Teck Resources Ltd (USA) (NYSE:TCK) over the past quarter and what we’re likely to see in its quarterly report.

Stats on Teck Resources

Source: Yahoo! Finance.

Why Teck Resources has dropped so far
In recent months, analysts have gotten a lot less excited about Teck Resources and its earnings prospects, slashing estimates for the just-ended quarter by more than a dime per share and knocking more than $0.50 off their earnings-per-share consensus for the full 2013 year. The stock has shared in that pain, dropping 35% since mid-January.

As much as gold’s plunge brought mining companies into the spotlight, Teck Resources Ltd (USA) (NYSE:TCK) has been struggling for a lot longer than the past week. Weakness in steel production was largely responsible for hammering shares of metallurgical-coal rival Cliffs Natural Resources Inc (NYSE:CLF) last quarter, which had to take a massive dividend cut in light of poor demand and rock-bottom prices for its coal and iron ore. Slower growth in overseas construction and infrastructure activity has also sent copper prices downward, adding to Teck’s coal woes and leaving it with few short-term bright spots.