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Agnico (AEM) Up 4.5% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Agnico Eagle Mines (AEM - Free Report) . Shares have added about 4.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Agnico due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Agnico Eagle Beats Earnings and Sales Estimates in Q3

Agnico Eagle logged profit of $76.7 million or 32 cents per share in third-quarter 2019, up from $17.1 million or 7 cents in the year-ago quarter.

Barring one-time items, adjusted earnings per share came in at 37 cents, which beat the Zacks Consensus Estimate of 27 cents.

The company generated revenues of around $683 million, up nearly 32% year over year. The figure surpassed the Zacks Consensus Estimate of $678 million.

Operational Highlights

Gold production rose 13.1% year over year to 476,937 ounces. The figure includes pre-commercial production of 33,134 ounces at Amaruq. Total cash costs per ounce were $653, up from $637 in the prior-year quarter.

All-in sustaining costs (AISC) were $903 per ounce, up 6.5% from year over year.

Financial Position

At the end of third quarter, cash and cash equivalents were around $258.4 million, down 50.3% year over year. Long-term debt was $1,363.4 million at the end of the reported quarter.

Total cash from operating activities amounted to $349.2 million in the third quarter, up nearly three-folds year over year.  

Outlook

Agnico Eagle revised its production guidance for 2019.

Gold production for the year is now projected in the band of 1.77-1.78 million ounces, up from 1.75 million ounces expected earlier. The projection includes pre-commercial production from Meliadine and Amaruq.

The company continues to expect total cash costs per ounce between $620 and $670. AISC is expected in the range of $875-$925 per ounce.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 14.87% due to these changes.

VGM Scores

Currently, Agnico has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Agnico has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.


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