MP Materials (NYSE: MP) stock tumbled 10.4% through 10:25 a.m. ET Friday after the rare earth mining company missed on both top and bottom lines in last night's second-quarter earnings report.

Heading into the quarter, analysts already weren't optimistic, forecasting a $0.09 per share loss on $40.6 million in sales -- but MP Materials still managed to miss those forecasts. The company's sales were only $31.3 million, and MP lost $0.17 per share, pro forma. Calculated according to generally accepted accounting principles (GAAP), the loss was even bigger -- $0.21 per share.

MP Materials stock Q2 earnings

All is not well at MP Materials, which suffered a 51% decline in sales and swung from a profit in the year-ago quarter to a big net loss this time around. Management blamed "upstream downtime" for part of the loss, but the bigger factor was "a continued weak pricing environment" for the rare earth elements that MP mines.

Rare earth oxide production slid 16% year over year, sales volumes dropped 43%, and the prices MP got for its rare earths -- which were already pretty low -- dropped a further 33%. On the plus side (maybe?), management noted that it doubled production of NdPr (neodymium praseodymium, used in producing rare earth magnets for wind turbines and electric car motors) sequentially from Q1, and expects to grow production a further 50% in Q3.

That's good news because MP has signed up a new automotive customer that needs this production for its magnets. What might make the news less good is that, if prices remain low (or fall farther), then MP could end up growing its losses the more NdPr it produces!

Is MP stock a buy?

The other good news is that one reason MP sold less NdPr than it produced in the quarter is because it's diverting some of its own production to concentrate it ("Stage II" production) in-house -- so it can sell the pure NdPr at higher prices.

Whether that will be enough to turn MP stock profitable again, though, remains to be seen.

Should you invest $1,000 in MP Materials right now?

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