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Wheaton (WPM) Earnings & Sales Miss Estimates in Q4, Up Y/Y

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Zacks Equity Research
·4 min read
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Wheaton Precious Metals Corp. WPM reported adjusted earnings of 33 cents per share in fourth-quarter 2020, missing the Zacks Consensus Estimate of 34 cents by a whisk. However, the bottom-line figure surged 100.6% year over year.

The company generated revenues of $286 million during the reported quarter, up 28.2% on a year-over-year basis. This upside was driven by a 33% increase in the average realized gold equivalent price, partly offset by a 3% decline in the number of Gold Equivalent Ounces (GEOs) sold. The top line, however, missed the Zacks Consensus Estimate of $309 million.

Wheaton’s gold production was 93,137 ounces, down from the prior-year quarter’s 107,054 ounces. Attributable silver production declined 10.2% year over year to 6,509 ounces, while palladium production also slipped 6.4% year over year to 5,672 ounces. The company sold 147,277 GEOs during the December-end quarter, down from the prior-year quarter’s 152,514 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 fourth-quarter 2020, average realized gold price was $1,882 per ounce, 27% higher than the year-ago quarter’s figure. Silver prices averaged $24.72 per ounce in the reported quarter, up 42.4% year over year. Palladium prices jumped 30.1% year over year to $2,348 per ounce.

Financial Position

The company had $193 million of cash in hand at the end of 2020, up from $104 million at 2019-end. It recorded an operating cash flow of $765 million in 2020 compared with $502 million in 2019. The company had $195 million outstanding under its revolving credit facility of $2 billion. During the December-end quarter, Wheaton repaid $293 million under the Revolving Facility. At the end of 2020, the company had a net debt of $2 million compared to $770 million at 2019-end.

In the fourth quarter, the company announced a quarterly dividend of 13 cents per share, reflecting an increase of 30% from 2019.

2020 Results

Wheaton reported adjusted earnings per share of $1.12 for 2020 compared with 54 cents reported in the prior year. Earnings beat the Zacks Consensus Estimate of $1.11 per share. Sales were up 27.3% year over year to $1 billion. However, the top line missed the Zacks Consensus Estimate of $1.12 billion.

Guidance

Wheaton’s attributable production is estimated between 720,000 GEOs and 780,000 GEOs for the current year. Gold production is expected in a band of 370,000-400,000 ounces. Silver production is expected between 22.5 million ounces and 24 million ounces, while production of other metals is anticipated in a band of 40,000-45,000 GEOs.

Business Updates

On Nov 5, Wheaton entered into a precious metals purchase agreement with Aris Gold Corporation to acquire 6.5% of the gold production and 100% of the silver production from the Marmato Project located in Colombia. On Dec 11, the company entered into an agreement with Capstone Mining Corp. to purchase a 50% silver stream from its Cozamin Mine located in Zacatecas, Mexico.

Price Performance

Shares of Wheaton have appreciated 58.3% over the past year compared with the industry’s growth of 89.9%.

Zacks Rank & Stocks to Consider

Wheaton currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Impala Platinum Holdings Limited IMPUY, Fortescue Metals Group Limited FSUGY and BHP Group BHP. All of these stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Impala Platinum has an expected earnings growth rate of 195.9% for the current fiscal year. The company’s shares have surged 84% in the past year.

Fortescue has a projected earnings growth rate of 84.3% for the current fiscal year. The company’s shares have soared 182% in a year’s time.

BHP Group has an estimated earnings growth rate of 65.6% for the current fiscal year. The company’s shares have appreciated 75% over the past year.

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