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Franco-Nevada (FNV) Q3 Earnings In Line, '21 Energy View Raised
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Franco-Nevada Corporation (FNV - Free Report) reported adjusted earnings of 87 cents per share in third-quarter 2021, up 9% from the prior-year period. The bottom-line figure came in line with the Zacks Consensus Estimate.
The company generated revenues of $316 million in the reported quarter, reflecting year-over-year growth of 13%. The top-line figure, however, missed the Zacks Consensus Estimate of $323 million. During the September-end quarter, 82.6% of revenues were sourced from gold and gold equivalents (53.5% gold, 13.1% silver, 5.3% platinum group metals and 10.7% from other mining assets).
The company sold 146,495 Gold Equivalent Ounces (GEOs) in the reported quarter, up from the prior-year quarter’s 134,817 GEOs. Higher contributions from Cobre Panama and Antamina, as well as the addition of Vale S. A’s (VALE - Free Report) Royalty Debentures and Condestable stream, were partly offset by lower deliveries from the Hemlo mine.
During the reported quarter, adjusted EBITDA grew 15% to $269.8 million, year over year.
In third-quarter 2021, the average gold price was $1,789 per ounce, 6.4% lower than the year-ago period. Silver prices averaged $24.36 per ounce in the reported quarter compared with the year-ago quarter’s $24.39. Platinum prices went up 13.4% year over year to $1,024 per ounce, and palladium prices increased 13.3% year on year to $2,459 per ounce.
FrancoNevada Corporation Price, Consensus and EPS Surprise
The company had $347 million cash in hand at the end of third-quarter 2021, down from the $534 million reported as of the end of 2020. It recorded an operating cash flow of $676 million in the first nine months of 2021, up from the $558 million witnessed in the prior-year period.
Franco-Nevada is debt free and uses its free cash flow to expand the company’s portfolio and payout dividends. It now has available capital of $1.6 billion.
Guidance
The company is on track to achieve its prior GEO guidance of 590,000 GEOs and 615,000 GEOs for the current year. Given the higher oil and gas prices, Franco-Nevada now expects to generate revenues of $195-$205 million from Energy assets, up from the previous projection of $155-$170 million.
Price Performance
Franco-Nevada’s shares have lost 5.6% over the past year, compared the industry’s loss of 27.2%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Franco-Nevada currently carries a Zacks Rank #3 (Hold).
Olin has an expected earnings growth rate of around 740% for the current fiscal year. The company’s shares have surged a whopping 229% in the past year.
Nucor has a projected earnings growth rate of around 583% for 2021. The company’s shares have soared 128% in a year’s time.
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Franco-Nevada (FNV) Q3 Earnings In Line, '21 Energy View Raised
Franco-Nevada Corporation (FNV - Free Report) reported adjusted earnings of 87 cents per share in third-quarter 2021, up 9% from the prior-year period. The bottom-line figure came in line with the Zacks Consensus Estimate.
The company generated revenues of $316 million in the reported quarter, reflecting year-over-year growth of 13%. The top-line figure, however, missed the Zacks Consensus Estimate of $323 million. During the September-end quarter, 82.6% of revenues were sourced from gold and gold equivalents (53.5% gold, 13.1% silver, 5.3% platinum group metals and 10.7% from other mining assets).
The company sold 146,495 Gold Equivalent Ounces (GEOs) in the reported quarter, up from the prior-year quarter’s 134,817 GEOs. Higher contributions from Cobre Panama and Antamina, as well as the addition of Vale S. A’s (VALE - Free Report) Royalty Debentures and Condestable stream, were partly offset by lower deliveries from the Hemlo mine.
During the reported quarter, adjusted EBITDA grew 15% to $269.8 million, year over year.
In third-quarter 2021, the average gold price was $1,789 per ounce, 6.4% lower than the year-ago period. Silver prices averaged $24.36 per ounce in the reported quarter compared with the year-ago quarter’s $24.39. Platinum prices went up 13.4% year over year to $1,024 per ounce, and palladium prices increased 13.3% year on year to $2,459 per ounce.
FrancoNevada Corporation Price, Consensus and EPS Surprise
FrancoNevada Corporation price-consensus-eps-surprise-chart | FrancoNevada Corporation Quote
Financial Position
The company had $347 million cash in hand at the end of third-quarter 2021, down from the $534 million reported as of the end of 2020. It recorded an operating cash flow of $676 million in the first nine months of 2021, up from the $558 million witnessed in the prior-year period.
Franco-Nevada is debt free and uses its free cash flow to expand the company’s portfolio and payout dividends. It now has available capital of $1.6 billion.
Guidance
The company is on track to achieve its prior GEO guidance of 590,000 GEOs and 615,000 GEOs for the current year. Given the higher oil and gas prices, Franco-Nevada now expects to generate revenues of $195-$205 million from Energy assets, up from the previous projection of $155-$170 million.
Price Performance
Franco-Nevada’s shares have lost 5.6% over the past year, compared the industry’s loss of 27.2%.
Zacks Rank & Stocks to Consider
Franco-Nevada currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Olin Corporation (OLN - Free Report) and Nucor Corporation (NUE - Free Report) . Both stocks currently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Olin has an expected earnings growth rate of around 740% for the current fiscal year. The company’s shares have surged a whopping 229% in the past year.
Nucor has a projected earnings growth rate of around 583% for 2021. The company’s shares have soared 128% in a year’s time.