Southern Copper Beats on EPS but GAAP Results Lag

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Southern Copper (NYSE: SCCO) reported earnings on July 31. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Southern Copper met expectations on revenue and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped and GAAP earnings per share shrank significantly.

Margins dropped across the board.

Revenue details
Southern Copper reported revenue of $1.66 billion. The three analysts polled by S&P Capital IQ expected revenue of $1.65 billion on the same basis. GAAP reported sales were 7.9% lower than the prior-year quarter's $1.80 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.66. The six earnings estimates compiled by S&P Capital IQ predicted $0.63 per share. GAAP EPS of $0.66 for Q2 were 15% lower than the prior-year quarter's $0.78 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 59.8%, 160 basis points worse than the prior-year quarter. Operating margin was 52.8%, 260 basis points worse than the prior-year quarter. Net margin was 33.9%, 260 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.66 billion. On the bottom line, the average EPS estimate is $0.58.

Next year's average estimate for revenue is $6.82 billion. The average EPS estimate is $2.52.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 4,196 members out of 4,358 rating the stock outperform, and 162 members rating it underperform. Among 958 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 927 give Southern Copper a green thumbs-up, and 31 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Southern Copper is hold, with an average price target of $36.68.

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