Southern Copper Posts Strong Q4 Earnings Amid Sales Rise

Southern Copper Corporation (SCCO) reported fourth-quarter 2024 earnings of $1.01 per share, slightly missing the Zacks Consensus Estimate of $1.02. However, this result marks a remarkable 74% increase compared to the same quarter last year. Increased sales of copper, zinc, and silver, along with higher prices, drove these results. Nonetheless, a decline in molybdenum sales volume impacted performance.

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Sales Volumes and Margins Show Significant Year-Over-Year Growth

Examining Price, Consensus, and EPS Trends for Southern Copper

Southern Copper’s sales for the quarter reached $2.784 billion, surpassing the Zacks Consensus Estimate of $2.780 billion, reflecting a 21.3% increase from the previous year.

Notably, zinc sales volumes increased by 59.4% compared to a year ago. While molybdenum sales volumes dipped by 2.1%, silver volumes rose by 21.6%. Copper sales also saw a 5.4% rise.

Cost of sales rose 3.6% year over year to $1.21 billion, yet the operating profit for the fourth quarter climbed to $1.31 billion, showcasing a 50.5% increase compared to the prior year. Consequently, the operating margin expanded to 47%, up from 37.8% a year ago.

Adjusted EBITDA for Q4 grew by 42.7% to $1.51 billion, resulting in an adjusted EBITDA margin of 54.1%, compared to 46% from the previous year.

Production Insights for Southern Copper

In terms of copper production, Southern Copper mined 238,888 tons in the fourth quarter, and this represents a 2.1% increase from last year. Copper sales increased 5.4% to 229,206 tons.

For the entire year, copper production totaled 973,851 tons, an increase of 6.9%, supported by enhanced output from both Peruvian and Mexican operations. Total copper sales for the year reached 938,528 tons, a 5.5% increase year over year.

Molybdenum production for the quarter saw a slight decline, totaling 6,994 tons—a decrease of 2.6%. Sales fell by 2.1% to 7,008 tons. However, for the year, molybdenum output climbed to 28,997 tons, an 8.1% rise, while sales increased by 7.9% year over year to 29,011 tons.

The company’s zinc production skyrocketed by 154.9% year over year to 43,148 tons in Q4. Zinc sales also surged by 59.4% to 42,120 tons. In 2024, zinc production increased nearly double to 130,011 tons, while sales improved by 44.6% to 144,139 tons.

Finally, silver production saw a boost of 18.3% year over year, reaching 5.68 million ounces, and sales increased to 5.392 million ounces—up 21.6% from the previous year. For the year 2024, silver production was 20.983 million ounces, marking a 14% increase, while sales rose by 15.7% to 20.842 million ounces.

Financial Overview: Cash Flow and Balance Sheet

SCCO generated net cash from operating activities of $4.42 billion in 2024, an increase from $3.57 billion in 2023, driven by higher net income. By the end of 2024, cash and equivalents totaled $3.26 billion, a significant rise from $1.15 billion at the close of 2023. Additionally, long-term debt decreased to $5.76 billion from $6.25 billion as of December 31, 2023.

2024 Annual Performance Snapshot

For 2024, Southern Copper reported earnings per share of $4.33, reflecting a 37.9% year-over-year improvement, though it fell short of the Zacks Consensus Estimate of $4.38. The company achieved record net sales of $11.43 billion, a 15.5% increase from the previous year, despite missing consensus sales expectations of $11.57 billion.

Looking Ahead: Southern Copper’s 2025 Guidance

SCCO anticipates producing approximately 967,000 tons of copper in 2025, maintaining levels similar to those in 2024. Zinc output is projected to rise to 171,700 tons, a significant 32% year-over-year boost. Furthermore, silver production is expected to increase by 10% to 23 million ounces, while molybdenum production is anticipated to decline by 10% to 26,200 tons.

Stock Performance Recap

Over the past year, shares of Southern Copper have risen by 19.9%, outperforming the broader industry, which saw a growth of 12.4% during the same period.

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Highlighting Trends in Non-Ferrous Mining Stocks

Freeport-McMoRan Inc. (FCX) reported net income of $274 million, or 19 cents per share, for the fourth quarter of 2024, down 29.3% from $388 million or 27 cents per share in the year-ago quarter. Sales fell by 3.1% year over year to $5.72 billion, missing the Zacks Consensus Estimate of $5.92 billion, mainly due to reduced copper sales.

Centrus Energy Corp. (LEU) reported Q4 2024 earnings of $3.20 per share, beating the Zacks Consensus Estimate of $1.06, though down from $3.58 a year prior. Sales for the quarter were $151.6 million, exceeding the estimate of $105 million, in contrast to $104 million reported in the same quarter last year.

Southern Copper’s Current Zacks Ranking and Recommendations

Currently, Southern Copper holds a Zacks Rank #3 (Hold). A stronger pick in the basic materials sector is Carpenter Technology Corporation (CRS), which has a Zacks Rank #2 (Buy). The consensus estimate for Carpenter Technology’s 2025 earnings stands at $6.83 per share, which has increased by 1% in the last 60 days. With an average trailing four-quarter earnings surprise of 15.7%, CRS shares have surged 188% over the past year.

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