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Pan American Silver (PASS) Q4 Earnings & Sales Lag Estimates

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Pan American Silver Corp. (PAAS - Free Report) reported adjusted earnings per share (EPS) of 19 cents in fourth-quarter 2021, missing the Zacks Consensus Estimate of 26 cents. The company had reported an adjusted EPS of 43 cents in the year-ago quarter.

Including one-time items, the company reported EPS of 7 cents in the fourth quarter compared with the year-ago quarter’s 80 cents.

Pan American Silver’s revenues declined 2% year over year to $422 million in the fourth quarter. The top line missed the Zacks Consensus Estimate of $447 million. Average realized silver price during the quarter declined 5.6% year over year to $23.33 per ounce. Average realized gold price also fell 4.4% year over year to $1,792 per ounce.  Revenues in the reported quarter were impacted by the timing of sales coupled with gold-finished goods inventory buildup.

Pan American Silver Corp. Price, Consensus and EPS Surprise

 

Pan American Silver Corp. Price, Consensus and EPS Surprise

Pan American Silver Corp. price-consensus-eps-surprise-chart | Pan American Silver Corp. Quote

 

Operational Update

Consolidated silver production in the quarter was 5.3 million ounces, up 10.4% year over year. Consolidated gold production of 156.7 thousand ounces in the reported quarter reflects year-over-year growth of 2.5%.

Silver segment’s cash costs were $9.74 per ounce in the fourth quarter, up 58% from the year-ago period’s levels. The segment’s all-in sustaining costs (AISC) increased 31% year over year to $13.57 per ounce in the quarter. Gold segment’s cash costs were $963 per ounce, up 26.2% from the year-ago quarter’s tally. The segment’s AISC costs amounted to $1,461 per ounce in the October-December period, reflecting a year-over-year increase of 42.8%.

Pan American Silver reported mine-operating earnings of $76 million in the quarter, indicating a year-over-year decline of 45%.

Financial Position

At the end of 2021, Pan American Silver had cash and short-term investment balances of $335.3 million and $500.0 million available in its revolving credit facility. Total debt amounted to $46 million. Net cash generated from operations was $392 million in 2021 compared with $462 million in 2020.

The company’s board declared a 20% increase in the cash dividend to 12 cents per share.. The dividend will be paid out on Mar 21, to shareholders of record as of the close on Mar 7, 2022. The company also announced a new dividend policy, which adds a variable amount to a base dividend of 10 cents per share on a quarterly basis.

2021 Performance

Pan American Silver reported an adjusted EPS of 77 cents in 2021 compared with 86 cents reported in the prior-year period. Earnings missed the Zacks Consensus Estimate of 84 cents. Including one-time items, the bottom line came in at 46 cents, down 46% from 85 cents reported in 2020.

Sales were up 22% year over year to $1.63 billion. The top line lagged the Zacks Consensus Estimate of $1.66 billion.

Guidance

Pan American Silver expects current year silver production between 19 million ounces and 20.5 million ounces. Silver segment cash costs are expected to be $10.70-$12.20 per ounce. AISC is estimated between $14.50 per ounce and $16.00 per ounce for the ongoing year.

It expects 2022 annual gold production between 550,000 ounces and 605,000 ounces. Gold segment cash costs are projected in the range of $970-$1,070 per ounce. AISC is forecast between $1,240 per ounce and $1,365 per ounce. Capital expenditures for 2022 are anticipated in the range of $280-$305 million.

Price Performance

Shares of the company have declined 30.8% in the past year compared with the industry’s decline of 33%.

Zacks Investment Research
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Zacks Rank & Stocks to Consider

Pan American Silver currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space include Commercial Metals Company (CMC - Free Report) , AdvanSix Inc (ASIX - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) . While CMC and ASIX sport a Zacks Rank #1 (Strong Buy), ATI carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Commercial Metals has a projected earnings growth rate of 62% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised upward by 23% in the past 60 days.

Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed once, the average surprise being 13.1%. CMC’s shares have surged around 61% in a year.

AdvanSix has an expected earnings growth rate of 7.4% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised upward by 3.2% in the past 60 days.

AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 46.9%. ASIX has appreciated around 63% in a year.

Allegheny has an expected earnings growth rate of 661.5% for the current year. The Zacks Consensus Estimate for ATI's current year earnings has been revised 45.6% upward in the past 60 days.

Allegheny beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 127.2%. ATI has rallied around 15.2% over a year.


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