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Wheaton (WPM) Beats on Q1 Earnings, Suspends '20 Guidance

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Wheaton Precious Metals Corp. WPM reported adjusted earnings of 22 cents per share in first-quarter 2020, beating the Zacks Consensus Estimate of 21 cents. The bottom line also surged 68.8% year over year.

The company generated revenues of $255 million in the reported quarter, up 13.2% on a year-over-year basis. Also, the top line outpaced the Zacks Consensus Estimate of $251 million. This upside was driven by an 18% increase in the average realized gold equivalent price, partly offset by a 4% decrease in gold equivalent ounces sold.

Wheaton’s attributable gold production was 182,241 ounces, up from the prior-year quarter’s 169,098 ounces, primarily driven by record attributable silver production at the Peñasquito mine. Attributable silver production increased 18.5% year over year to 6,704 ounces, while palladium production grew 12.3% year over year to 5,312 ounces.

The company sold 166,121 Gold Equivalent Ounces (GEOs) in the first quarter, down from the prior-year quarter’s 173,464 GEOs.

Wheaton Precious Metals Corp Price, Consensus and EPS Surprise

Wheaton Precious Metals Corp Price, Consensus and EPS Surprise
Wheaton Precious Metals Corp Price, Consensus and EPS Surprise

Wheaton Precious Metals Corp price-consensus-eps-surprise-chart | Wheaton Precious Metals Corp Quote

Prices

In first-quarter 2020, average gold price was $1,589 per ounce, 21.5% higher than the year-ago quarter figure. Silver prices averaged $17.03 per ounce in the first quarter, up 8.9% year over year. Palladium prices jumped 59.2% year over year to $2,298 per ounce.

Financial Position

The company had $127 million of cash in hand as of Mar 31, 2020, up from $104 million as of Dec 31, 2019. It recorded an operating cash flow of $178 million in the reported quarter compared with the prior-year quarter’s $118 million. The company had outstanding liability of $716 million under its $2-billion revolving credit facility. During the January-March quarter, Wheaton repaid $159 million under the revolving facility. At the first-quarter end, net debt reduced by $182 million to $589 million.

Guidance Suspension

Wheaton has withdrawn the production guidance for the current year due to the temporary ramp down of operations at some of its partner mines amid the coronavirus pandemic. 

As of May 5, six partner operations located in Mexico and Peru (Constancia, Yauliyacu, San Dimas, Los Filos, Peñasquito and Antamina) were temporarily suspended to comply with government restrictions to contain spread of the virus.

Price Performance

Shares of the company have surged 118% over the past year as against the industry’s decline of 12.1%.



Zacks Rank & Other Stocks to Consider

Wheaton currently carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the basic materials space are Newmont Corporation NEM, Barrick Gold Corporation GOLD and Franco-Nevada Corporation FNV, each currently carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Newmont has an expected earnings growth rate of 90.2% for 2020. The company’s shares have surged 103.6% in the past year.

Barrick Gold has an estimated earnings growth rate of 60.8% for the ongoing year. Its shares have soared 112.7% over the past year.

Franco-Nevada has a projected earnings growth rate of 19.2% for the current year. The company’s shares have appreciated 92.5% in a year’s time.

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Newmont Corporation (NEM) : Free Stock Analysis Report
 
FrancoNevada Corporation (FNV) : Free Stock Analysis Report
 
Barrick Gold Corporation (GOLD) : Free Stock Analysis Report
 
Wheaton Precious Metals Corp (WPM) : Free Stock Analysis Report
 
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