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Pan American Silver (PAAS) Q1 Earnings Miss, Sales Top Estimates

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Pan American Silver Corp. PAAS reported adjusted earnings per share (EPS) of 15 cents in first-quarter 2022, missing the Zacks Consensus Estimate of 22 cents. The company had reported an adjusted EPS of 18 cents in the year-ago quarter.

Including one-time items, the company reported an EPS of 36 cents in the first quarter against the year-ago quarter’s loss per share of 4 cents.

Pan American Silver’s revenues increased 19.5% year over year to $439.9 million in the first quarter. The top line surpassed the Zacks Consensus Estimate of $419 million. The average realized silver price during the quarter declined 9% year over year to $24.03 per ounce. The average realized gold price was up 5.1% year over year to $1,880 per ounce.

Pan American Silver Corp. Price, Consensus and EPS Surprise

Pan American Silver Corp. Price, Consensus and EPS Surprise
Pan American Silver Corp. Price, Consensus and EPS Surprise

Pan American Silver Corp. price-consensus-eps-surprise-chart | Pan American Silver Corp. Quote

Operational Update

Consolidated silver production in the quarter was 4.6 million ounces, remaining flat year over year. Consolidated gold production of 131 thousand ounces in the reported quarter reflects a year-over-year decline of 4.6%.

The Silver segment’s cash costs were $10.23 per ounce in the first quarter, down 17% from the year-ago period’s levels. The segment’s all-in sustaining costs (AISC) declined 21% year over year to $13.41 per ounce in the quarter. The Gold segment’s cash costs were $1,069 per ounce, up 26.3% from the year-ago quarter’s tally. The segment’s AISC costs amounted to $1,502 per ounce in the January-March period, reflecting a year-over-year increase of 42%.

Pan American Silver reported mine-operating earnings of $67 million in the quarter, indicating a year-over-year decline of 26%.

Financial Position

At the end of the first-quarter 2022, Pan American Silver had cash and short-term investment balances of $326.3 million and $500.0 million available in its revolving credit facility. Total debt amounted to $47 million. Net cash generated from operations was $68.7 million in the first quarter compared with $29.8 million in the prior-year quarter.

Pan American Silver’s board declared the quarterly cash dividend to be 12 cents per share. The dividend will be paid out on Jun 3 to shareholders of record as of the close on May 24, 2022. The dividend comprises a base dividend of 10 cents per share and a variable dividend of 2 cents per share. On Feb 23, 2022, the company announced this dividend policy, which adds a variable amount to a base dividend of 10 cents per share on a quarterly basis.

Guidance

Pan American Silver reaffirms current year financial and production guidance. Silver production for the year is expected to be between 19 million ounces and 20.5 million ounces. Silver segment cash costs are expected to be $10.70-$12.20 per ounce. AISC is estimated between $14.50 per ounce and $16.00 per ounce for the ongoing year.

The company expects 2022 annual gold production to be between 550,000 ounces and 605,000 ounces. Gold segment cash costs are projected in the range of $970-$1,070 per ounce. AISC is forecast between $1,240 per ounce and $1,365 per ounce. Capital expenditures for 2022 are anticipated in the range of $280-$305 million.

Price Performance

Shares of the company have declined 26.4% in the past year compared with the industry’s loss of 39.9%.

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Zacks Rank & Stocks to Consider

Pan American Silver currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks worth considering in the basic materials space include Steel Dynamics, Inc. STLD, Commercial Metals Company CMC and Nutrien NTR.

Steel Dynamics, sporting a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 18.5% for the current year. The Zacks Consensus Estimate for STLD's current-year earnings has been revised 32.5% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Steel Dynamics beat the Zacks Consensus Estimate for earnings in each of the last four quarters, the average being roughly 2.5%. STLD has gained around 25% in the past year.

Commercial Metals, carrying a Zacks Rank #1, has a projected earnings growth rate of 78.2% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 31.9% upward over the past 60 days.

Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing the same in one. It has a trailing four-quarter earnings surprise of roughly 16%, on average. CMC has gained around 21% in a year.

Nutrien, carrying a Zacks Rank #1 at present, has an expected earnings growth rate of 42.8% for the current year. NTR’s consensus estimate for earnings for the current year has been revised 37% upward in the past 60 days.

Nutrien beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed once, the average surprise being 5.8%. NTR has rallied around 53% in a year.


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Commercial Metals Company (CMC) : Free Stock Analysis Report

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Nutrien Ltd. (NTR) : Free Stock Analysis Report

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