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Franco-Nevada (FNV) Beats on Q1 Earnings & Revenue Estimates

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Franco-Nevada Corporation (FNV - Free Report) delivered adjusted earnings of $65.2 million or 35 cents per share in first-quarter 2019, up from the prior-year quarter’s $63.9 million or 34 cents per share. In addition, the EPS figure surpassed the Zacks Consensus Estimate of 28 cents.

The company generated revenues of $179.8 million in the reported quarter, reflecting year-over-year improvement of 3.8%. The revenue figure also beat the Zacks Consensus Estimate of $166 million. In the first quarter, 88.4% of revenues were sourced from gold and gold equivalents (63.4% gold, 11.1% silver, 10.6% platinum group metals and 3.3% other mining assets) and 11.6% from energy (oil, gas and natural gas liquids).

The company sold 122,049 Gold Equivalent Ounces (GEOs) in the quarter, up 5.5% from 115,671 GEOs in the prior-year quarter.

During the March-end quarter, adjusted EBITDA inched up 0.7% to $140.9 million from $139.9 million witnessed in the comparable period last year.

Franco-Nevada Corporation Price, Consensus and EPS Surprise

Prices
 
At the end of the first quarter, average gold price was $1,304 per ounce, approximately 1.8% lower than the year-ago quarter. Silver prices averaged $15.57 per ounce in the quarter, down 7.1% year over year. Platinum too fell 15.8% year over year to $823 per ounce, while palladium prices jumped 38.6% year over year to $1,435 per ounce.

Financial Position

The company ended the first quarter with $72.6 million cash in hand, up from $69.7 million reported at the end of 2018. It recorded operating cash flow of $143.6 million for the three-month period ended Mar 31, 2019, compared with $137.5 million reported in the prior-year period.

Franco-Nevada’s board of directors has announced a quarterly dividend of 25 cents per share, showing an increase of 4.2% from its last payout. The company has increased its dividend for the 12th consecutive year. The raised dividend will be paid on Jun 27, to shareholders of record on Jun 13, 2019.
 
Cobre Panama project begins its initial production in the first-quarter, and expects to produce 140,000-175,000 tons of copper for Cobre Panama in 2019. The company forecasts milling operation at an annualized rate of 72 million tons per year, by the end of this year. The company expects this project to reach its mill throughput capacity of 100 million tons per year in 2023.

Shares of Franco-Nevada have lost 5.2%, over the past year, compared to the industry’s decline of 7.8%.



Zacks Rank & Stocks to Consider

Franco-Nevada currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Basic Materials space are Israel Chemicals Ltd. (ICL - Free Report) , Arconic Inc. and Arch Coal Inc. (ARCH - Free Report) , each carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Israel Chemicals has an expected earnings growth rate of 13.51% for 2019. The company’s shares have gained 19.6% in the past year.

Arconic has an estimated earnings growth rate of 3.5% for the current year. The company’s shares have appreciated 23.4% in a year’s time.

Arch Coal has a projected earnings growth rate of 5.49% for 2019. Its shares have rallied 25% over the past time.

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