Molycorp Inc (NYSE:MCP)’s Fourth-Quarter Report Raises Eyebrows

Molycorp Inc (NYSE:MCP) has yet again robbed investors of their hopes after reporting a gloomy fourth-quarter results. The company posted bigger than expected net loss of 39 cents versus the Street’s estimate of -$0.26 per share. The company reported $116.2 million in revenues that declined 6% year-over-year. The quarter marks the 12th straight quarter when the company has reported a net loss.

Have technical analyst identified a strong wedge in MCP?

Listing in danger

Following the results, there are little hopes left if Molycorp Inc (NYSE:MCP) will ever be able to regain $1 level on the New York Stock Exchange. Moreover, the quarterly reports cast doubts on the company’s ability to keep running as a ‘going concern’. The company posted negative cash flows of $75.8 million while its total capital spent accounted $23.3 million. The cash balance as of the end of the year 2014 came in at $211.7 million.

Nothing encouraging

Molycorp Inc (NYSE:MCP) informed the investors during its earnings call that it produced 1,328 metric tons of rare earth oxides during the fourth quarter and 691 metric tons during the third-quarter at Mountain Pass facility. Both the production levels are lower than expected as the production was affected by interruptions and the company’s efforts to optimize its operations. Molycorp Inc (NYSE:MCP) stated that lower productions were recorded during the first two months of 2015 as well.

Meanwhile, the company confirmed that it has hired Miller Buckfire in order to boost its balance sheet. However, Molycorp Inc (NYSE:MCP) steered away from questions that sought information on its capital structure, raising concerns for the investors. The company has limited time in its hand to keep its listing maintained on NYSE. The reports from the recent quarters indicate that Molycorp Inc (NYSE:MCP) has no road left except to travel southward. Earlier in January 2015, the company had notified that it has received listing compliance notice from the NYSE.

About the Author

John is a special projects and general assignment reporter, noted for breaking several exclusive stories.

Leave A Response