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Wheaton (WPM) Q2 Earnings Miss, Sales Beat Estimates, Up Y/Y

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Wheaton Precious Metals Corp. (WPM - Free Report) reported adjusted earnings per share of 36 cents in second-quarter 2021, missing the Zacks Consensus Estimate of 37 cents by a whisker. The bottom-line figure, however, improved 65.4% year over year.

The company generated revenues of a record $330 million during the reported quarter, up 33% on a year-over-year basis. This upside was driven by a 24% increase in the average realized gold equivalent price and 7% increase in the number of gold equivalent ounces sold. The top line also beat the Zacks Consensus Estimate of $320 million.

Wheaton’s gold production was 90,290 ounces, up from the prior-year quarter’s 88,783 ounces. Attributable silver production jumped 84.1% year over year to 6,720 ounces, while palladium production declined 8% to 5,301 ounces. The company sold 176,700 GEOs during the June-end quarter, 7.2% up from the prior-year quarter’s 164,844 GEOs.

Prices

In second-quarter 2021, average realized gold price was $1,801 per ounce, 5% higher than the year-ago quarter’s figure. Silver prices averaged $26.69 per ounce in the reported quarter, up 59.5% year on year. Palladium prices were up 46% year over year to $2,797 per ounce.

Financial Position

The company had $235 million of cash in hand at the end of second-quarter 2021 compared with $193 million at the end of 2020. It recorded an operating cash flow of $216 million in the second quarter compared with the prior-year quarter’s $152 million. The company fully paid a revolving credit facility of $2 billion.

During the second quarter, the company announced a quarterly dividend of 15 cents per share, reflecting an increase of 50% from the year-ago period.

Guidance

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

Business Updates

On Apr 1, the company closed its prior agreement with Capstone to purchase 100% of the payable gold production from the Santo Domingo project located in the Atacama Region, Chile. On Jul 20, the company entered into an agreement with Rio2 to purchase gold stream from the latter’s Fenix Gold project in Chile.

Price Performance

Shares of Wheaton have gained 3%, so far this year, compared with the industry’s growth of 17.7%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank & Stocks to Consider

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

Better-ranked stocks in the basic materials space include Nucor Corporation (NUE - Free Report) , Cabot Corporation (CBT - Free Report) and Dow Inc. (DOW - Free Report) .

Nucor has a projected earnings growth rate of 455% for 2021. The company’s shares have soared 97.9% so far this year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cabot has an expected earnings growth rate of 137% for the current fiscal year. The company’s shares have gained 21.8% so far this year. It currently sports a Zacks Rank of 2.

Dow has an estimated earnings growth rate of 403% for the current year. So far this year, the company’s shares have gained 14.1%. It currently carries a Zacks Rank #2.

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