* Coal prices fall 28 pct, copper down 8 pct
* Adjusted profit C$252 mln vs C$425 mln
* Says coal prices too low to maintain industry's production
Oct 24 (Reuters) - Teck Resources Ltd reported adrop in third quarter adjusted earnings on Thursday on weakeningcoal, copper and zinc prices, but results from Canada's largestdiversified miner beat analysts' expectations and the stockjumped in early trading.
Coal volumes and costs per tonne were better than expected,BMO Capital Markets analyst Meredith Bandy said in a note toclients. Shares were up 5.2 percent at C$30.94 midmorning on theToronto Stock Exchange.
Teck also said it is making progress reducing its operatingcosts. It has identified more than C$330 million ($318 million)in annual savings, and has made about C$300 million of thosecuts so far, progressing from the roughly C$220 million in cutsthe company reported as of the second quarter.
"While we believe that the longer term fundamentals forsteelmaking coal, copper and zinc are favorable, the recentweakness in these markets may well persist for some time," theVancouver-based company said in a statement.
A 28-percent decline in coal prices and an 8-percent fall incopper prices from a year earlier reduced revenue by about C$410million in the quarter, the company estimated.
Teck said it has commitments in place to sell 5.6 milliontonnes of coal in the current quarter, at an average price ofUS$145 per tonne
"The current price for steelmaking coal remains below whatwe believe is required to sustain adequate production in theindustry in the long term," Chief Executive Don Lindsay said inthe statement.
A weak steel market has hurt the price of steelmaking coal,which is typically more profitable than thermal coal used toproduce electricity. Nearly all of Teck's coal reserves aresteelmaking, or metallurgical, coal.
At the same time, a slowdown in China's economic growth hasweighed on copper prices as supply rises, and many believe themarket will be in surplus both this year and next.
Teck's earnings rose to C$267 million, or 46 Canadian centsa share, from C$256 million, or 44 Canadian cents, a yearearlier, when earnings were hurt by a C$196 million chargerelated to refinancing some of its debt.
Excluding that year-earlier charge and other items, adjustedprofit dropped to C$252 million, or 44 Canadian cents a share,from C$425 million, or 73 Canadian cents.
Revenue was little changed, C$2.52 billion compared withC$2.51 billion a year earlier.
Analysts had been expecting earnings of 38 Canadian cents ashare on revenue of C$2.25 billion, according to Thomson ReutersI/B/E/S.
Coal sales rose 36 percent to 7.6 million tonnes, and costof sales declined to $50 per tonne in the third quarter comparedwith $58 per tonne a year earlier.
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