Teck Resources Limited (TECK) Income Statement

The 78.3% YoY growth in 2026Q2 marks a sharp acceleration from the 12.3% growth in 2025Q2, indicating that QB2's contribution is now materializing. The sequential revenue decline from $3.9B in 2026Q1 to $3.6B in 2026Q2 suggests some quarter-to-quarter volatility, likely due to shipment timing and commodity price fluctuations. This growth trajectory appears sustainable as copper volumes continue to ramp, but investors should monitor whether the pace can be maintained once the QB2 ramp-up reaches steady state.

The gross margin expansion from 23.3% in 2025Q2 to 44.3% in 2026Q2 is dramatic and suggests that the copper segment's higher-margin profile is now dominating the mix. The 2025Q4 margin of 29.9% and 2026Q1's 43.5% indicate a clear upward trend, likely driven by QB2's low-cost production and favorable copper prices. However, the 21.84% gross margin reported in the broader data set may reflect a different period or segment, so investors should reconcile these figures. The margin improvement appears to be sustainable if copper prices remain firm and QB2 continues to ramp efficiently.

The operating margin expansion from 15.4% in 2025Q2 to 40.1% in 2026Q2 is remarkable, indicating that fixed costs are being spread over a much larger revenue base. SG&A expenses remained relatively stable at $123.1M in 2026Q2 versus $81M in 2025Q2, but as a percentage of revenue, they fell from 4.0% to 3.4%, highlighting cost discipline. This operating leverage is a key driver of the earnings surge, but it also implies that any downturn in copper prices could compress margins sharply, given the high fixed-cost structure.

The reduction in COGS relative to revenue is a direct result of the copper segment's lower cash costs, particularly as QB2 ramps up. The 2025Q3 COGS of $2.7B on revenue of $3.4B (79.4% of revenue) was elevated, likely due to ramp-up inefficiencies, but the 2026Q2 figure shows a significant improvement. This suggests that management's focus on cost control is yielding results, but investors should monitor whether this efficiency is sustainable as the mine matures. The increase in carbon taxes and royalty adjustments in Chile could pose future cost pressures.

The shift from a coal-dominated earnings base to copper is evident in the margin and revenue trends. The 2024Q3 operating loss of -$628M was a low point, likely due to impairments and weak coal prices, but the subsequent quarters show a steady recovery. The 2026Q2 operating income of $1.4B is a testament to the successful ramp-up of QB2, which is now the primary earnings driver. This inflection is structural, as the coal divestment will further concentrate earnings in copper, but it also introduces concentration risk if copper prices decline.