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Agnico Eagle's (AEM) Q1 Earnings Lag, Sales Beat Estimates

Agnico Eagle Mines Limited AEM reported net income of $44.9 million or 19 cents per share for the first quarter of 2018, down 41% from year-ago quarter’s net income of $76 million or 33 cents.

 

Barring one-time items, earnings for the quarter were 15 cents per share, which missed the Zacks Consensus Estimate of 17 cents.

 

Agnico Eagle recorded revenues of $578.4 million in the first quarter of 2018, up about 5.7% from $547.5 million in the year-ago quarter. The figure beat the Zacks Consensus Estimate of $557 million.

 

 

Agnico Eagle Mines Limited Price, Consensus and EPS Surprise

 

Agnico Eagle Mines Limited Price, Consensus and EPS Surprise | Agnico Eagle Mines Limited Quote

 

Operational Highlights

 

Payable gold production in the first quarter fell 6.9% year over year to 389,278 ounces from 418,216 ounces in the year-ago quarter. The decline is mainly due to lower throughput levels at Meadowbank. 

 

Total cash costs per ounce for the first quarter were $648, up 20.2% from the prior-year quarter figure of $539.

 

All-in sustaining costs (AISC) was $889 for the first quarter, 20% higher compared to the prior-year quarter figure of $741.  This is mainly due to expected lower gold production and higher total cash costs per ounce.

 

Financial Position

 

As of Mar 31, 2018, cash and cash equivalents were around $452.3 million, up 43% from year-ago quarter.

 

Long-term debt was $1,372.4 million at the end of the quarter, up 27.9% from $1,073.4 million the year ago quarter.

 

There was no outstanding balance on credit facility as of Mar 31, 2018. This resulted in available credit lines of roughly $1.2 billion, excluding the uncommitted $300 million accordion feature.

 

Total capital expenditure in the first quarter was $179.4 million.

 

Outlook

 

Agnico Eagle has reiterated its previous guidance for total cash costs for full-year 2018 that is expected in the range of $625-$675 per ounce. AISC is expected in the range of $890-$940 per ounce for 2018. 

 

The company’s production guidance for 2018 remains unchanged at 1.53 million ounces of gold.

 

Price Performance

 

Agnico Eagle’s shares have declined 5.9% over a year, underperforming the 0.3% upside recorded by its industry.

 

 

 

 

Zacks Rank & Stocks to Consider

 

Agnico Eagle currently carries a Zacks Rank #3 (Hold).

 

Some better-ranked stocks in the basic material space are Kronos Worldwide Inc. KRO, Celanese Corporation CE and BASF SE BASFY. All three stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Kronos has an expected long-term earnings growth of 5%. Its shares have gained 36.2% over a year. 

 

Celanese has an expected long-term earnings growth of 8.9%. Its shares have moved up 26.3% over a year.

 

BASF has an expected long-term earnings growth of 6.24%. Its shares have gained 24.6% over a year.

 

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