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First Majestic (AG) to Report Q4 Earnings: What to Expect?

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First Majestic Silver Corp. (AG - Free Report) is slated to report fourth-quarter 2020 results on Feb 18.

Q3 Performance

In third-quarter 2020, First Majestic Silver reported year-over-year improvement in both its top and bottom lines. The company also surpassed the Zacks Consensus Estimate on both counts.

In the trailing four quarters, the company beat estimates once and missed in the remaining three quarters. The company has a trailing four-quarter negative earnings surprise of 118.6%, on average.

Q4 Estimates

The Zacks Consensus Estimate for First Majestic’s fourth-quarter earnings is currently pegged at 10 cents. The estimate has been revised downward by 23% over the past 30 days. The company had reported break-even earnings per share in the prior-year quarter.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for First Majestic Silver this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: First Majestic Silver has an Earnings ESP of 0.00%.

Zacks Rank: Currently, the company carries a Zacks Rank #4 (Sell).

Factors to Note

Silver production in the fourth quarter rose 3% year over year to 3.5 million ounces — the company’s second highest quarterly silver production. Gold production slumped 21% year over year to 26,343 ounces. During the December-end quarter, First Majestic recorded total production of 5.5 million silver equivalent ounces,  reflecting a decline of 11% year over year.

The San Dimas produced 1.9 million ounces of silver, reflecting year over year increase of 17%. Notably, the mine produced the highest ever quarterly silver production since its acquisition by First Majestic Silver in May 2018. The mine’s gold production was down 8% to 19,980 ounces in the quarter to be reported.

The La Encantada mine produced 1.1 million silver ounces, highlighting a 11% increase from the prior quarter and the highest quarterly production since second-quarter 2013. The upbeat performance can be attributed to continued improvements in recoveries and underground production from the caving areas.

The Santa Elena mine produced 0.4 million ounces of silver and 6,294 ounces of gold, representing a plunge of 32% and 45% from the prior-year quarter levels.

In fourth-quarter 2020, silver prices gained around 13% on the back of recovery in industrial activity. Gold, which had a solid run overall in 2020, lost momentum during fourth-quarter 2020 on improving prospects for the global economy, conclusion of the widely anticipated US election and rollout of vaccines. Nevertheless, average gold prices in fourth-quarter 2020 were around $1,878 an ounce, higher than $1,513 an ounce in the year-ago quarter.

First Majestic’s fourth-quarter 2020 results are likely to reflect higher-than-expected silver production at the San Dimas and La Encantada mines and robust silver prices. However, lower year-over-year gold production might have weighed on the to-be-reported quarter’s performance.

The company’s cost control management efforts might have contributed to the fourth-quarter’s performance.

Price Performance

First Majestic’s shares have appreciated 81.4% over the past year, compared with the industry’s rally of 49.5%.

Stocks With Favorable Combinations

Here are some companies in the basic materials space you may want to consider as our model shows that these have the right combination of elements to post earnings beat this quarter:

Brigham Minerals, Inc. MNRL has an Earnings ESP of +36.7% and a Zacks Rank #2 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Koppers Holdings Inc. KOP has an Earnings ESP of +23.20% and a Zacks Rank of 3 currently.

Albemarle Corporation ALB has an Earnings ESP of +3.02% and a Zacks Rank #3, at present.

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