Teck Cominco posts $360M Q1 profit

Vancouver — Teck Cominco (TCK.B-T, TCK-N) posted 2007 first-quarter earnings of $360 million ($1.67 per share) on operational revenue of $1.34 billion, compared with $448 million ($2.19 per share) on revenue of $1.27 billion for the same period last year.

The company’s treasury (cash and short-term investments) stood at $4.78 billion as of the end of the first quarter compared with $5.28 billion at the end of last year and $3.17 billion at the end of the 2006 first quarter.

“Earnings from continuing operations for the first quarter were in line with our expectations,” said company president and CEO Don Lindsay. “Core operations continued to perform well, but our financial results in the first quarter were impacted by the decline in metal prices from those at the end of 2006.”

The company reported a $123-million boost in revenue (over last year’s first quarter) from its Trail smelting and refining complex, due mostly to higher lead and zinc prices. However, the gain was partially offset by lower coal revenues due to decreased sales volume and prices. Base metals revenues came in largely on par with those from last year’s first quarter.

The company says that first-quarter earnings are usually affected by a drop in sales volumes, with lower zinc and lead sales from the Red Dog mine, in northern Alaska, attributed to the seasonal factor. A dip in coal sales also typically occurs because the price for the year is usually negotiated during the first quarter; winter conditions can also affect the price.

In February, Teck Cominco announced plans to extend the mine life at its 97.5%-owned Highland Valley Copper operation, in south-central B.C., by six years to 2019. A major push-back of the Valley pit east wall is under way, with stripping for the west wall push-back scheduled to start in 2009. Copper output for the mine in 2007 is forecast at 142,000 tonnes (313 million lbs.).

The company’s Lennard Shelf zinc mine in Western Australia, a 50-50 joint venture with Xstrata (XSRAF-O, XTA-L), launched operations during the quarter, with commercial production and initial concentrate shipments scheduled for the second quarter.

Teck Cominco also recently entered into a joint venture with UTS Energy (UTS-T, UEYCF-O) on the Lease 14 oilsands property, in the Athabasca region of northern Alberta. The Vancouver-based mining giant will acquire 50% of the project from UTS for about $200 million.

Class B shares of Teck Cominco recently closed at around $86.10. The stock has traded in a 52-week range of $57.55-$95.16.