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Silver Standard (SSRM) Earnings Surpass Estimates in Q3

Zacks Equity Research
·4 min read

Silver Standard Resources Inc. SSRM reported third-quarter 2020 adjusted earnings per share of 49 cents, which beat the Zacks Consensus Estimate of 28 cents. The bottom-line figure also marked an improvement of 69% over the 29 cents reported in the prior-year quarter. Increase in gold equivalents sold, higher average realized prices for gold and silver, and lower costs led to improved earnings in the quarter.  

Including one-time items, earnings came in at 19 cents per share compared with 17 cents in the prior-year quarter.

Operational Update

Silver Standard’s total revenues improved 52.5% year over year to $225 million. Gold equivalent produced increased 2% year over year to 106,838 ounces in the reported quarter. Gold equivalents sold surged 21% to 115,312 ounces in the quarter on a year-over-year basis.

Average realized gold price surged 29% to $1,914 per ounce from the year-ago quarter. Average realized silver price was $26.69 per ounce in the quarter, reflecting an impressive year-over-year growth of 54%.

Silver Standard Resources Inc. Price, Consensus and EPS Surprise

Silver Standard Resources Inc. Price, Consensus and EPS Surprise
Silver Standard Resources Inc. Price, Consensus and EPS Surprise

Silver Standard Resources Inc. price-consensus-eps-surprise-chart | Silver Standard Resources Inc. Quote

Cash cost per gold equivalent ounce dipped 3% year over year to $735 in the third quarter. All-in sustaining costs (“AISC”) per gold equivalent ounce sold declined 9% to $1,034 in the reported quarter from $1,136 in the prior-year quarter.

Income from operations surged 60% year over year to $83.2 million during the third quarter. Gross margin was 37% in the third quarter compared with 35% in the last year’s quarter. Operating income was $52.7 million, up 32% from the year-ago quarter’s $39.9 million.

Other Updates

During the quarter, Silver Standard completed the transaction with Alacer. The combined entity boats a diversified portfolio of high quality, long-life operating assets across four jurisdictions.

As of Sep 30, 2020, cash and cash equivalents were $733.6 million, significantly up from the $503.6 million as of Dec 30, 2019. The company generated $44 million of cash flow from operations in the third quarter compared with $55 million in the prior-year quarter.

On Nov 12, 2020, the company’s board approved the initiation of a quarterly cash dividend of 5 cents per share beginning in first-quarter 2021.

Guidance

For fiscal 2020, the company expects to produce 680,000 to 760,000 gold equivalent ounces from its four operating mines. Consolidated AISC are projected between $965 and $1,040 per gold equivalent ounce.

Price Performance

Shares of Silver Standard have gained 31.2% over the past year, compared with the industry’s rally of 19.0%.

Zacks Rank & Stocks to Consider

Silver Standard currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Agnico Eagle Mines Limited AEM, Newmont Corporation NEM and Barrick Gold Corporation GOLD. While Agnico Eagle Mines and Newmont flaunt a Zacks Rank #1 (Strong Buy), Barrick Gold carries a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Agnico Eagle Mines Limited has an expected earnings growth rate of a whopping 103% for the current year. The company’s shares have rallied 26% over the past year.

Newmont has a projected earnings growth rate of 98% for 2020. The stock has gained 73% in a year’s time.

Barrick Gold has an estimated earnings growth rate of 99% for the ongoing year. Its shares have appreciated 56% in the past year.

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Silver Standard Resources Inc. (SSRM) : Free Stock Analysis Report
 
Newmont Corporation (NEM) : Free Stock Analysis Report
 
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