Agnico (AEM) Down 5.4% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Agnico Eagle Mines (AEM). Shares have lost about 5.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Agnico due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Agnico Eagle’s Q2 Earnings & Sales Surpass Estimates
Agnico Eagle reported second-quarter 2023 adjusted earnings of 65 cents per share, down from 75 cents in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of 55 cents.
The company generated revenues of $1,718.2 million, up 8.7% year over year. The top line surpassed the Zacks Consensus Estimate of $1,424.2 million.
Compared with the prior-year period, production costs per ton increased in the reported quarter, primarily owing to higher mill maintenance costs due to the autoclave shutdown and higher materials prices in underground mining. This was partly offset by the accumulation of stockpile inventory.
Operational Highlights
Payable gold production was 873,204 ounces in the reported quarter, up from 858,170 ounces in the prior-year quarter. The figure surpassed our estimate of 855,669 ounces.
Total cash costs per ounce for gold were $840, up from $726 a year ago. It was higher than our estimate of $808.
Realized gold prices were $1,975 per ounce in the quarter, up from $1,866 a year ago. It was above our estimate of $1,860.
AISC was $1,150 per ounce in the quarter compared with $1,026 per ounce a year ago.
Financial Position
Agnico Eagle ended the year with cash and cash equivalents of $432.6 million, down 41.9% sequentially. Long-term debt was around $1,942 million, down 13.4% sequentially.
Total cash from operating activities amounted to $722 million in the second quarter, up 14% year over year.
Outlook
The company expects payable gold production for 2023 to be in the range of 3.24-3.44 million ounces. It also projects total cash costs per ounce of $840-$890 and AISC of $1,140-$1,190 per ounce for 2023.
The forecast for capital expenditures for 2023 is roughly $1.42 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Agnico has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Agnico has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report
