Southern Copper (SCCO) Down 6.1% Since Last Earnings Report: Can It Rebound?

Core Viewpoint - Southern Copper reported strong third-quarter earnings, beating estimates and showing year-over-year growth in sales and operating profit, despite a decline in copper production and sales volumes [2][3][4]. Financial Performance - Earnings per share for Q3 2025 were $1.35, exceeding the Zacks Consensus Estimate of $1.25, marking a 21% increase year over year [2]. - Sales rose 15% year over year to $3.38 billion, surpassing the Zacks Consensus Estimate of $3.16 billion [3]. - Operating profit increased by 22% year over year to $1.77 billion, with an operating margin of 52.4%, up from 49.5% in the previous year [4]. Production and Sales Details - Copper production decreased by 6.9% year over year to 234,892 tons, with a 3.6% decline in copper sales to 234,300 tons [5][6]. - Molybdenum production grew by 8.3% year over year to 7,874 tons, while zinc production surged 46% to 45,482 tons [6][7]. - Silver production increased by 16.4% to 6.21 million ounces, with sales rising 21.9% to 6.32 million ounces [7]. Cash Flow and Balance Sheet - Net cash from operating activities was $1.56 billion, up from $1.44 billion in the same quarter of 2024 [8]. - Cash and cash equivalents reached $3.95 billion, an increase from $3.26 billion at the end of 2024, while long-term debt rose to $6.75 billion from $5.76 billion [8]. Future Guidance - Southern Copper anticipates copper production of approximately 958,800 tons for 2025, a 2% decrease from the previous year, while projecting a 34% increase in zinc production to 174,700 tons [9]. - Silver production is expected to be around 23 million ounces, a 10% increase from 2024, and molybdenum production is projected to rise by 4% to 30,000 tons [9]. Market Sentiment - Recent estimates for Southern Copper have shown a downward trend, although the company holds a Zacks Rank 1 (Strong Buy), indicating expectations for above-average returns in the coming months [10][12].