The union at Pan American Silver Corp.’s (PAAS) San Vicente mine in Bolivia has gone on strike, thus shutting down the entire operation. The union is disputing the recent changes in senior management at the company's fully-owned subsidiary, Pan American Silver Bolivia.
Access is currently allowed to only those who are responsible for maintenance of critical systems necessary to enable a smooth restart. The work, which was stopped on Jul 7, 2014, has had no material impact on Pan American to date. However, if the shut-down is extended then there will be an adverse impact on the annual production forecast for the San Vicente mine and eventually Pan American.
Pan American is in talks with the union representatives and all interested parties to reach an agreeable solution.
Pan American released its first quarter 2014 results in May 2014. The company logged net earnings of $6.8 million (or 5 cents per share) on a reported basis in the quarter, lower than net earnings of $20.1 million (or 13 cents a share) recorded in the year-ago quarter. Lower metal prices and higher cost of sales weighed on the bottom line.
Adjusted (excluding one-time items) earnings were $8.6 million or 6 cents per share in the reported quarter compared with adjusted earnings of $40 million or 26 cents earned in the year-ago quarter. The results beat the Zacks Consensus Estimate of 2 cents per share.
Revenues decreased roughly 14% year over year to $209.7 million in the reported quarter. The results, however, surpassed the Zacks Consensus Estimate of $194 million. The decrease in the top line was due to sharply lower prices for all metals produced by Pan American, partly offset by higher quantities of silver and gold sold during the quarter.
Pan American currently carries a Zacks Rank #3 (Hold).Read the Full Research Report on PAAS
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