UPDATE 1-Molycorp loss widens as rare earths prices slide

Thu Aug 8, 2013 5:03pm EDT

Aug 8 (Reuters) - U.S. rare earths company Molycorp Inc reported a wider quarterly loss on Thursday even as revenue rose, hurt by a sharp drop in prices, and its shares fell in aftermarket trading.

Chief Executive Constantine Karayannopoulos said there was an industry-wide buyers' strike in the second quarter.

"There was nothing moving, and prices continued to slide through the quarter," he said in an interview.

But Karayannopoulos said prices bottomed out at the beginning of current quarter, and customers started to come back with orders.

Produced primarily in China, rare earths are an essential part of many high-tech products including smartphones, tablets and hybrid vehicles. Prices skyrocketed in 2010 and early 2011 as China clamped down on exports, but it has eased export controls since then and prices have declined.

Molycorp is near completion of a $1.25 billion modernization and expansion at its main mine, Mountain Pass in California, which it hopes will bring down unit costs.

Molycorp also restated some first quarter results, reporting a lower cost of goods sold and a narrower net loss. The restated first-quarter net loss was $38.2 million, or 27 cents a share, revised down from a loss of $46.4 million, or 33 cent a share.

In the second quarter, Molycorp's loss attributable to common shareholders was $74.0 million, or 44 cents a share, compared with a loss of $70.5 million, or 71 cents, a year earlier, when the company had fewer shares outstanding.

Excluding costs associated with its expansion and other items, the loss in the latest quarter widened to $60.9 million, or 36 cents a share, from $3.0 million, or 3 cents, a year earlier. Revenue rose to $136.9 million from $104.6 million.

Analysts, on average, had been expecting a loss of 23 cents a share on revenue of $157.6 million, according to Thomson Reuters I/B/E/S.

Shares dropped 7.6 percent to $6.85 in aftermarket trading.

FILED UNDER: