Yahoo Finance Pan American Silver (PAAS) Q4 Earnings Miss Estimates, Revenues Dip Y/Y
Pan American Silver Corp. PAAS reported an adjusted loss per share of 2 cents for fourth-quarter 2022 due to weak precious metal prices, as well as inflated costs. The Zacks Consensus Estimate was pegged at earnings of 2 cents per share for the quarter. PAAS had reported adjusted earnings per share of 19 cents in the year-ago quarter.
Including one-time items, Pan American Silver reported a loss of 82 cents per share in the quarter against the year-ago quarter’s earnings of 7 cents.
Pan American Silver’s revenues declined 11% year over year to $375 million in the quarter under review. The top line missed the Zacks Consensus Estimate of $392 million. The average realized silver price in the quarter was $21.17 per ounce, down 9% from $23.33 in the prior-year quarter. The average realized gold price was down 3% year over year to $1,736 per ounce.
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
Silver production in the quarter was 4.7 million ounces, down 10% year over year. Gold production was 164.4 thousand ounces in the reported quarter, reflecting a year-over-year increase of 5%.
The Silver segment’s cash costs were $14.41 per ounce in the fourth quarter, up 48% from the year-ago period’s level. The segment’s all-in-sustaining costs (AISC) rose 31% year over year to $17.79 per ounce in the quarter.
The Gold segment’s cash costs were $1,077 per ounce, reflecting a 12% increase from the year-ago quarter. The segment’s AISC costs amounted to $1,502 per ounce in the October-December period, representing a year-over-year increase of 3%.
Pan American Silver reported a mine-operating profit of $35 million in the quarter compared with $76 million in the fourth quarter of 2021.
Financial Position
As of Dec 31, 2022, PAAS had cash and short-term investment balances of $142.3 million (excluding long-term investments), working capital of $423.5 million and $340.0 million available under its revolving Sustainability-Linked Credit Facility. The total debt of $226.8 million was related to SL-Credit Facility, lease liabilities and construction loans in Peru. Net cash used in operations was $112 million in the fourth quarter.
Update on Yamana Acquisition
On Nov 8, 2022, Pan American Silver and Agnico Eagle Mines AEM announced an arrangement agreement with Yamana Gold Inc. AUY, whereby PAAS would acquire all the issued and outstanding common shares of AUY. Also, per the agreement, AUY would sell its Canada assets, including certain subsidiaries and partnerships that hold interests in the Canada Malartic mine, to AEM.
In January 2023, shareholders of Pan American Silver and Yamana approved the arrangement. PAAS recorded transaction-related costs of $157.3 million in the fourth quarter.
The transaction is expected to be completed in the first quarter of 2023, subject to the receipt of an approval from the Mexican Federal Economic Competition Commission and satisfaction or waiver of certain other closing conditions.
This is a transformational and strategic transaction for Pan American Silver, which will strengthen its position as the leader in silver and gold production in Latin America. This deal will add long-life, low-cost assets and boost PAAS’ portfolio to 12 operating mines. Its silver production is expected to increase 50%, whereas gold production will double. Considering the strong cash flow generating abilities of these assets, the deal will strengthen PAAS’ financial position.
Price Performance
Image Source: Zacks Investment Research
Shares of Pan American Silver have lost 43% in the past year compared with the industry’s 35.8% decline.
Zacks Rank
Pan American Silver currently carries a Zacks Rank #3 (Hold).
A better-ranked stock in the basic materials space is CalMaine Foods, Inc. CALM, which currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CalMaine Foods’ fiscal 2023 earnings per share is pegged at $16.75, suggesting 515.8% growth from the year-ago reported figure. Earnings estimates have moved 106.8% north in the past 60 days. CALM has a trailing four-quarter earnings surprise of 15.3%, on average. Its shares have gained 31.2% in the past year.
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Pan American Silver Corp. (PAAS) : Free Stock Analysis Report
