Why Is Agnico (AEM) Up 10.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Agnico Eagle Mines (AEM). Shares have added about 10.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Agnico due for a pullback? 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 Beats Earnings and Sales Estimates in Q2
Agnico Eagle logged net income of $27.8 million or 12 cents per share in second-quarter 2019, up from around $5 million or 2 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share came in at 10 cents, which beat the Zacks Consensus Estimate of 2 cents.
Agnico Eagle generated revenues worth $526.6 million, down around 5.3% year over year. Nevertheless, the figure surpassed the Zacks Consensus Estimate of $493.8 million.
Operational Highlights
Gold production rose 1.8% year over year to 412,315 ounces. The figure includes pre-commercial production of 29,699 ounces at Meliadine and 2,147 ounces at Amaruq. Total cash costs per ounce were $652, down from $656 in the prior-year quarter.
All-in sustaining costs were $953 per ounce, up 3.5% from year over year.
Financial Position
At the end of second quarter, cash and cash equivalents were around $118.7 million, down from around $708.3 million in the year-ago quarter.
Long-term debt was $1,362.7 million at the end of the quarter.
Total cash from operating activities amounted to $126.3 million in the reported quarter, up 5.2% year over year.
Outlook
Agnico Eagle reaffirmed production and cost guidance for 2019.
Gold production for the year is projected at 1.75 million ounces. The projection includes pre-commercial production from Meliadine and Amaruq.
Total cash costs per ounce are projected between $620 and $670. AISC is expected in the range of $875-$925 per ounce.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 27.5% due to these changes.
VGM Scores
At this time, Agnico has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile 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. It comes with little surprise Agnico has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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