Agnico-Eagle Mines Limited’s (AEM) first-quarter 2012 adjusted earnings (excluding one-time items other than stock-based compensation expenses) of 44 cents per share surpassed the Zacks Consensus Estimate of 38 cents. Including one-time expenses and gains, earnings came in at 46 cents per share, up from 26 cents per share reported in the year-ago quarter.
Revenue
Total revenue in the reported quarter increased 13.4% year over year to $474.1 million, beating the Zacks Consensus Estimate of $423 million. Payable gold production in the first quarter inched up 1% to 254,955 ounces due to increased mining efficiencies from the company’s five mine operations except Goldex mine (which was shut down in October 2011). Agnico-eagle had record gold production from two of its mines in Kittila and also from its operations in Mexico.
Cash costs in the quarter jumped 11.9% to $594 per ounce, mainly due to higher costs at Meadowbank, byproduct revenues at LaRonde and absence of revenue from the Goldex mine.
Financial Position
Cash and cash equivalents stood at $199.1 million as of March 31, 2012, compared with $221.5 million as of December 31, 2011, as the company repaid debt of about $90 million in the first quarter of 2012. Capital expenditures in the reported quarter were $76 million, including $18.5 million at Meliadine, $17.9 million at LaRonde, $14.5 million at Kittila, $14.4 million at Meadowbank, $4.2 million at Pinos Altos and $3.8 million at Lapa.
The company generated strong cash flows with cash provided by operating activities of $196.5 million in the quarter.
Outlook
The company has reaffirmed its prior guidance and expects production to be in the range of 875,000 to 950,000 ounces of gold for 2012 at total cash costs per ounce of $690 to $750.
Agnico-Eagle increased its forecast for capital expenditure by $36 million and now expects it to be $418 million in fiscal 2012. The company increased its forecast as $10 million is expected to be spent in 2012 for the construction of a shaft at Pinos Altos, $8 million for the acceleration of ramp development and exploration drilling in the Rimpi zone at Kittila, and for other new projects.
Agnico-Eagle, which faces stiff competition from Barrick Gold Corporation (ABX), Kinross Gold Corporation (KGC) and Newmont Mining Corp. (NEM), currently retains a Zacks #3 Rank, reflecting a short-term (1 to 3 months) Hold rating. Currently, we have a long-term (more than 6 months) Underperform recommendation on the stock.
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