Why Is Agnico (AEM) Up 4.6% Since Last Earnings Report?
It has been about a month since the last earnings report for Agnico Eagle Mines (AEM). Shares have added about 4.6% in that time frame, underperforming 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 drivers.
Agnico Eagle’s Q3 Earnings & Sales Surpass Estimates
Agnico Eagle reported third-quarter 2023 adjusted earnings of 44 cents per share, down from 49 cents in the year-ago quarter. The bottom line topped the Zacks Consensus Estimate of 43 cents.
The company generated revenues of $1,642.4 million, up 13.3% year over year. The top line surpassed the Zacks Consensus Estimate of $1,570.7 million.
Gold production increased in the reported quarter from the prior-year period, predominantly due to production from the acquisition of the remaining 50% of the Canadian Malartic complex after the transaction with Yamana Gold Inc. was closed. This was partially offset by lower production at the Detour Lake and Fosterville mines as well as the LaRonde complex.
Operational Highlights
Payable gold production was 850,429 ounces in the reported quarter, up from 816,795 ounces in the prior-year quarter. The figure surpassed our estimate of 844,723 ounces.
Total cash costs per ounce for gold were $898, up from $779 a year ago. It was higher than our estimate of $864.
Realized gold prices were $1,928 per ounce in the quarter, up from $1,726 a year ago. It was above our estimate of $1,916.
AISC were $1,210 per ounce in the quarter compared with $1,106 per ounce a year ago. It was higher than our estimate of $1,187.
Financial Position
Agnico Eagle ended the quarter with cash and cash equivalents of $355.5 million, down 17.8% sequentially. Long-term debt was around $1,842.6 million, down 5.1% sequentially.
Total cash from operating activities amounted to $502.1 million in the third quarter, down from $575.4 million a year ago.
Outlook
The company expects its 2023 gold production to be above the midpoint of its guidance of 3.24-3.44 million ounces. Additionally, Agnico Eagle estimates it is on track to meet its 2023 projection of between $840 and $890 for total cash costs per ounce and between $1,140 and $1,190 for AISC per ounce. With capitalized exploration excluded, the total anticipated capital expenditures for 2023 are still projected at $1.42 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -11.64% due to these changes.
VGM Scores
At this time, Agnico has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Agnico has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report
