MP Materials (NYSE: MP), the company that owns the sole rare earth mine in this country, didn’t have a prosperous Friday on the stock market. Its shares were hit with an 8% decline following the company’s publication of its latest quarterly earnings release. That fall was particularly conspicuous, given that the benchmark S&P 500 (SNPINDEX: ^GSPC) more or less traded sideways that day.
Material shortfall
MP Materials’ first-quarter figures were disseminated after market hours Thursday, and on Friday it felt as if the stock was suffering a hangover.
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That’s because the company’s total revenue, although it rose by 25% year over year to $60.8 million, whiffed on the analyst estimate. Pundits tracking the stock were collectively modeling $64.4 million.
MP Materials also missed on the bottom line, albeit more narrowly, but its non-GAAP (generally accepted accounting principles) adjusted net loss was notably steeper compared to that of first quarter 2024. The company was in the red at nearly $20 million, or $0.12 per share, against the $12.4 million deficit in the comparable year-ago period. The consensus analyst estimate for the line item was $0.11 per share.
War, what is it good for?
Compounding those misses, the U.S. and China continue to spar about international trade, specifically the heavy tariffs the President Trump has imposed on the Asian country. In line with this, MP Materials recently halted its shipments of rare-earth concentrates to China, but a single client in that nation was responsible for more than four-fifths of the company’s revenue last year.
No matter how the company performs, if the trade war persists, sentiment on its stock will remain negative. Hopefully the trade war won’t last too long — otherwise, MP Materials could be in for some difficult times.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends MP Materials. The Motley Fool has a disclosure policy.
