RE:earnings - key point Possibleidiot01 wrote: Commodity prices fluctuate and while higher cost inventory sales raised revenues , they also lowered margins.
""With regard to the quarter, while rare earth pricing remains attractive in absolute dollar terms, and is nearly double pre-pandemic norms, the retreat in pricing we have seen over the past six months placed short-term pressure on our margin levels, as higher cost inventory flows through our results of operations," he added. "This lead-lag volatility is normal in our industry and, of course, we reap the benefit in a rising price environment."
Higher cost inventory do not raise revenue. Revenue is driven by market price of the commodity. If you buy expensive material, but price on it drops, nobody would care how much you pay for it. But lead lag do exist. If NEO is not covering up own mistakes or l-t problems, we should see improved margin next quarter.
Magnets is good business now, but supply disruptions and economy problems is here. Neo has good cash position to weather storm and having non-Russian and non-Chinese supply is a big bonus, they should begin developing Greenland assets.
Big blow, no question, 82% gross profit reduction, will see how management will react.