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BMO sees coal taking bite out of Teck profit

BMO Nesbitt Burns Inc. lowered its first quarter earnings target for Teck Cominco Ltd. by 24 per cent, warning that lower-than-expected coal production will hurt the company's profit.

Analyst Tony Robson changed his estimate to 47 cents a share, down from 62 cents, saying that while the company will benefit from stronger copper prices a 25 per cent decline in metalurgical coal production will act as a drag.

"The approximate $12-billion of debt on the balance sheet continues to weigh heavily on the company's valuation and earnings," he wrote in a note to clients. "BMO Research is awaiting further action from Teck regarding asset sales, debt restructuring and a possible equity issue.

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Teck reports on Monday. The average estimate, according to Thomson One Analytics, is for 44 cents a share.

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