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MP Materials (MP) Q4 Earnings & Revenues Beat Estimates, Up Y/Y

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MP Materials Corp. MP reported fourth-quarter 2020 adjusted earnings per share of 15 cents which marked a substantial improvement from 3 cents in the prior-year quarter driven by higher volumes and per-unit profitability. The Zacks Consensus Estimate for the quarter was pegged at breakeven earnings per share.

Including one-time items, the company reported earnings of 20 cents per share compared with 2 cents in the prior-year quarter.

The company generated revenues of $42 million in fourth-quarter 2020, reflecting year-over-year growth of 100%. The top line beat the Zacks Consensus Estimate of $38 million. The improved performance was driven by increases in both the realized sales prices of contained rare earth oxide (REO) in concentrate and in the metric tons (MT) of REO sold.

The realized sales price increase of 70% was due to higher demand for REO, which boosted market prices, as well as lifting of certain import duties in China. REO production volume rose 8% year over year to 9,337 MT. Sales volumes came in 21% higher than the prior-year quarter to 10,320 MT due to higher demand for REO as well as higher percentages of REO in concentrate driven by improved productivity.

Production cost improved 20% year over year to $16 million. Operating costs increased 77% to $34 million from the year-ago quarter. Adjusted EBITDA was $18 million in the reported quarter, reflecting a surge of 297%. This was driven by higher volumes and per-unit profitability, partially offset by increased public company costs. Adjusted EBITDA margin was 42.6% compared with 21.5% in the year-ago quarter.

2020 Results

MP Materials’ adjusted earnings per share in 2020 were 20 cents, a significant improvement from the prior-year’s loss of 12 cents. The Zacks Consensus Estimate was a loss of 31 cents per share. Including one-time items, the company incurred a loss per share of 27 cents in 2020 against a loss per share of 10 cents in 2019. Sales surged 83% year over year to $134 million that beat the Zacks Consensus Estimate of $130 million.

Share Price Performance

Over the past six months, MP Materials has gained 240.7% compared with the industry’s rally of 21.6%.

Zacks Rank & Stocks to Consider

MP Materials currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks worth considering in the basic materials space are Impala Platinum Holdings Limited IMPUY, Fortescue Metals Group Limited FSUGY and Nucor Corporation NUE. All of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Impala Platinum has an expected earnings growth rate of 195.9% for the current fiscal. The company’s shares have soared 106% in the past six months.

Fortescue has a projected earnings growth rate of 84.3% for the current fiscal. The company’s shares have gained 39% in the past six months.

Nucor has a projected earnings growth rate of 122.5% for the current fiscal year. The company’s shares have appreciated 60% in the past six months.

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