MP Materials had a busy quarter as it continues to morph itself from a mining company into a supplier of products for critical U.S. manufacturing operations.
Thursday evening, the rare-earths miner reported a second-quarter 1-cent per-share loss, and earnings before interest, taxes, depreciation, and amortization, or Ebitda, of $28.5 million on sales of $108.5 million.
That's a little better than Wall Street expected. Analysts projected a 1-cent-per-share loss and Ebitda of $27.1 million on sales of $96.9 million. A year ago, MP reported a 13-cent loss, a $12.5 million Ebitda loss, and sales of $57.4 million.
Shares were down 2.6% in after-hours trading at $46.24 shortly after results were released. They dropped 0.9% in regular trading, while the S&P 500 fell 0.2%.
A year ago, MP was in a transition, from selling concentrate to other concerns, to using that product for its own downstream operations. Concentrate sales have stopped, and rare-earth oxide and metal sales have grown. MP produced 840 metric tons of Neodymium-Praseodymium, or Nd-Pr, up 41% year over year. Sales volumes were 1,006 metric tons, up 127% year over year.
Production and sales should be at least 10 times higher by the end of 2028.
The company also produced 11,072 metric tons of rare-earth oxide, a precursor product, from its mines. That amount is down 16% from a year ago, but the company typically takes maintenance downtime in the second quarter.
Magnet-related revenue was down 17% year over year, but MP is still qualifying new customers as it increases production of rare-earth magnets. It expects to ship magnets to General Motors in the fourth quarter and to Apple in 2027.
MP also announced a new agreement with an undisclosed large aerospace and defense contractor worth hundreds of millions to provide it with gadolinium. That's a so-called heavier rare-earth metal that ends up in high-performance alloys for jet engines and lasers, among other applications.
"Across our business, we continued to execute on our long-term strategy, " said CEO Jim Litinsky in a news release. MP continues to ramp its magnet-making facility near Fort Worth, Texas, while building another facility in Northlake, Texas. "As we expand our commercial relationships, scale domestic manufacturing capacity, and deepen our vertical integration, we are strengthening MP's competitive position and building a differentiated industrial platform that we believe will drive long-term shareholder value."
Through Thursday trading, MP stock was down roughly 5% year to date and 30% over the past 12 months. Shares jumped from below $20 a share in Spring 2025 to more than $100 by the fall in the aftermath of a blockbuster agreement with the Defense Department that provided capital, a guaranteed customer, and a price floor for Nd-Pr product.
The Defense Department wanted to ensure a U.S. rare-earth supply, breaking the Chinese near-monopoly on the product. MP generated $17.6 million in "price protection agreement income" in the second quarter, down from $42.3 million in the first quarter.
The decrease shows that Nd-Pr prices have reset near the level the Defense Department is paying, also indicating that the ostensible market price for Nd-Pr wasn't a true market price. It was being managed by the dominant supplier, China.
Comments