Molycorp (MCP) Surges on Surpise Beat, But Rare Earth Prices Remain in Focus

After surging 31 percent Friday on the back of better-than-expected Q1 results and positive comments about demand, shares of Molycorp (NYSE: MCP) are up another 2 percent Monday. Analysts at Cowen note the positives in the quarter, but maintained a Hold rating given the softness in rare earth prices.

In the quarter, the company sold 763 metric tons of REO products, an increase of 21% over 4Q12. The company reported an adjusted quarterly loss of $0.15/share, above consensus expectations for a loss of $0.30/share and saw improvement in its gross margin over 4Q12, due to a more favorable product mix, offset by lower q/q REO pricing.

The initial Mountain Pass target run rate of 19,000 metric tons per annum is on track to be achieved by mid-year, the analysts note. Costs remain the focus as rare earth prices continue to soften.

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