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Wheaton (WPM) Q3 Earnings Beat, Rise Y/Y on Higher Prices
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Wheaton Precious Metals (WPM - Free Report) reported adjusted earnings per share of 27 cents in third-quarter 2023, which surpassed the Zacks Consensus Estimate of earnings of 25 cents per share. The bottom line increased 29% year over year as higher average realized prices for gold and silver offset the impact of the lower Gold Equivalent Ounces (GEOs) sold.
Including one-time items, WPM reported earnings per share of 26 cents compared with earnings of 44 cents per share in the third quarter of 2022.
Wheaton Precious generated revenues of around $223 million in the quarter, which rose 1.8% on a year-over-year basis. The year-over-year increase was attributed to higher realized commodity prices, which was partially offset by lower sales volumes. The top line however missed the Zacks Consensus Estimate of $242 million.
Wheaton Precious Metals Corp. Price, Consensus and EPS Surprise
The total cost of sales was down 17.5% year over year to $96 million in the reported quarter. The gross profit was up 24% year over year to $127 million. The gross margin was 56.9% in the reported quarter compared with 46.7% in the prior-year quarter.
General and administrative expenses increased 3% year over year to $8.6 million. Earnings from operations in the quarter under review was $112 million, a 9% increase from $103 million in the third quarter of 2022.
Average cash costs in the third quarter of 2023 were $418 per GEO, down from $451 per GEO in the year-ago quarter. Cash operating margin increased 25% year over year to $1,457 per GEO sold, due to higher realized price per ounce.
Gold Volumes Up, Silver Lags
Attributable gold production in the quarter was 105,436 ounces, up 46% from the prior-year quarter’s output of 72,078 ounces. The figure came in higher than our projection of gold production of 82,712 ounces for the quarter.
Attributable silver production slumped 42% year over year to 3.36 million ounces in the quarter. Production came in lower than our estimate for silver production of 5.064 million ounces.
GEOs produced in the quarter were 154,800 in the September-end quarter, up 1.2% from the prior-year quarter’s figure attributed to solid outperformances at both Salobo and Constancia. The figure came in higher than our projection of 154,266 GEOs.
Wheaton sold 119,030 GEOs in the quarter, down 12% from the last year’s quarter. GEO sales came in lower than our model’s estimate of 142,967 ounces. While gold ounces sold improved 20% year over year, it was offset by a 43.4% plunge in silver ounces sold.
Gold & Silver Prices Improve
In third-quarter 2023, the average realized gold price was $1,944 per ounce. The figure was 12.5% higher than the year-ago quarter. Silver prices were $23.73 per ounce in the reported quarter, up 24% year over year. Palladium prices were $1,251 per ounce, down 40% from $2,091 per ounce in the prior-year quarter. Cobalt prices slumped 39% year over year to $13.87 per pound.
Financial Position
Wheaton Precious had around $834 million of cash in hand at the end of the third quarter of 2023 compared with $696 million at the end of 2022. It reported an operating cash flow of $171 million in the quarter under review compared with $154 million in the prior-year quarter.
WPM had a debt-free balance sheet as of Sep 30, 2023. The company has a $2 billion undrawn revolving credit facility.
Other Updates
In the third quarter, WPM acquired a 0.5% Net Smelter Royalty from Liberty Gold Corp., on the Black Pine Oxide Gold Project for a total cash consideration of $3.6 million.
The company has recently entered into an agreement with Waterton Copper Corp. to purchase 100% of payable silver from the Mineral Park mine. The total cash consideration for the deal was $115 million.
2023 Guidance
Wheaton affirmed its guidance for attributable production between 600,000 GEOs and 660,000 GEOs for 2023. Due to the temporary suspension of the Peñasquito mine from Jun 7, 2023, to Oct 13, 2023, WPM now expects production for the year to have a higher weighting toward gold.
Price Performance
Shares of Wheaton have gained 13% in the past year compared with the industry’s 2.2% growth.
Carpenter Technology has an average trailing four-quarter earnings surprise of 14.3%. The Zacks Consensus Estimate for CRS’ fiscal 2024 earnings is pegged at $3.57 per share. The consensus estimate for 2024 earnings has moved 3% north in the past 60 days. Its shares have gained 66% in a year’s time.
Universal Stainless & Alloy Products has an average trailing four-quarter earnings surprise of 44.4%. The Zacks Consensus Estimate for USAP’s 2023 earnings is pegged at 27 cents per share. Earnings estimates have been unchanged in the past 60 days. USAP’s shares gained 87% in the last year.
The consensus estimate for ANDE's current-year earnings has been revised 3.3% upward over the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. ANDE shares have rallied around 28% in a year.
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Wheaton (WPM) Q3 Earnings Beat, Rise Y/Y on Higher Prices
Wheaton Precious Metals (WPM - Free Report) reported adjusted earnings per share of 27 cents in third-quarter 2023, which surpassed the Zacks Consensus Estimate of earnings of 25 cents per share. The bottom line increased 29% year over year as higher average realized prices for gold and silver offset the impact of the lower Gold Equivalent Ounces (GEOs) sold.
Including one-time items, WPM reported earnings per share of 26 cents compared with earnings of 44 cents per share in the third quarter of 2022.
Wheaton Precious generated revenues of around $223 million in the quarter, which rose 1.8% on a year-over-year basis. The year-over-year increase was attributed to higher realized commodity prices, which was partially offset by lower sales volumes. The top line however missed the Zacks Consensus Estimate of $242 million.
Wheaton Precious Metals Corp. Price, Consensus and EPS Surprise
Wheaton Precious Metals Corp. price-consensus-eps-surprise-chart | Wheaton Precious Metals Corp. Quote
The total cost of sales was down 17.5% year over year to $96 million in the reported quarter. The gross profit was up 24% year over year to $127 million. The gross margin was 56.9% in the reported quarter compared with 46.7% in the prior-year quarter.
General and administrative expenses increased 3% year over year to $8.6 million. Earnings from operations in the quarter under review was $112 million, a 9% increase from $103 million in the third quarter of 2022.
Average cash costs in the third quarter of 2023 were $418 per GEO, down from $451 per GEO in the year-ago quarter. Cash operating margin increased 25% year over year to $1,457 per GEO sold, due to higher realized price per ounce.
Gold Volumes Up, Silver Lags
Attributable gold production in the quarter was 105,436 ounces, up 46% from the prior-year quarter’s output of 72,078 ounces. The figure came in higher than our projection of gold production of 82,712 ounces for the quarter.
Attributable silver production slumped 42% year over year to 3.36 million ounces in the quarter. Production came in lower than our estimate for silver production of 5.064 million ounces.
GEOs produced in the quarter were 154,800 in the September-end quarter, up 1.2% from the prior-year quarter’s figure attributed to solid outperformances at both Salobo and Constancia. The figure came in higher than our projection of 154,266 GEOs.
Wheaton sold 119,030 GEOs in the quarter, down 12% from the last year’s quarter. GEO sales came in lower than our model’s estimate of 142,967 ounces. While gold ounces sold improved 20% year over year, it was offset by a 43.4% plunge in silver ounces sold.
Gold & Silver Prices Improve
In third-quarter 2023, the average realized gold price was $1,944 per ounce. The figure was 12.5% higher than the year-ago quarter. Silver prices were $23.73 per ounce in the reported quarter, up 24% year over year. Palladium prices were $1,251 per ounce, down 40% from $2,091 per ounce in the prior-year quarter. Cobalt prices slumped 39% year over year to $13.87 per pound.
Financial Position
Wheaton Precious had around $834 million of cash in hand at the end of the third quarter of 2023 compared with $696 million at the end of 2022. It reported an operating cash flow of $171 million in the quarter under review compared with $154 million in the prior-year quarter.
WPM had a debt-free balance sheet as of Sep 30, 2023. The company has a $2 billion undrawn revolving credit facility.
Other Updates
In the third quarter, WPM acquired a 0.5% Net Smelter Royalty from Liberty Gold Corp., on the Black Pine Oxide Gold Project for a total cash consideration of $3.6 million.
The company has recently entered into an agreement with Waterton Copper Corp. to purchase 100% of payable silver from the Mineral Park mine. The total cash consideration for the deal was $115 million.
2023 Guidance
Wheaton affirmed its guidance for attributable production between 600,000 GEOs and 660,000 GEOs for 2023. Due to the temporary suspension of the Peñasquito mine from Jun 7, 2023, to Oct 13, 2023, WPM now expects production for the year to have a higher weighting toward gold.
Price Performance
Shares of Wheaton have gained 13% in the past year compared with the industry’s 2.2% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Wheaton currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , Universal Stainless & Alloy Products, Inc. (USAP - Free Report) and The Andersons Inc. (ANDE - Free Report) . Each of these stocks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has an average trailing four-quarter earnings surprise of 14.3%. The Zacks Consensus Estimate for CRS’ fiscal 2024 earnings is pegged at $3.57 per share. The consensus estimate for 2024 earnings has moved 3% north in the past 60 days. Its shares have gained 66% in a year’s time.
Universal Stainless & Alloy Products has an average trailing four-quarter earnings surprise of 44.4%. The Zacks Consensus Estimate for USAP’s 2023 earnings is pegged at 27 cents per share. Earnings estimates have been unchanged in the past 60 days. USAP’s shares gained 87% in the last year.
The consensus estimate for ANDE's current-year earnings has been revised 3.3% upward over the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. ANDE shares have rallied around 28% in a year.