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Yamana Gold (AUY) Q4 Earnings Lag Estimates, Sales Down Y/Y

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Yamana Gold Inc. AUY reported net earnings (attributable to equity holders) of $14.6 million or 2 cents per share in fourth-quarter 2019 against a net loss of $61.4 million or 6 cents per share reported in the prior-year quarter.

Barring one-time items, adjusted earnings were 3 cents per share, which missed the Zacks Consensus Estimate of 4 cents.

Revenues declined 20.6% year over year to $383.8 million in the quarter under review.

Cost of sales was $288.4 million, down 27.3% from $397.1 million in the prior-year quarter.

Yamana Gold Inc. Price, Consensus and EPS Surprise

 

Q4 Operational Highlights

Total gold production was 221,595 ounces, down 24.2% from 292,483 ounces in the prior-year quarter.

Total cost of sales for gold moved up 8.9% to $1,118 per ounce, while all-in sustaining costs (AISC) increased to $1,012 per ounce from $921 in the year-ago quarter.

Total silver production was 2.97 million ounces, down 9.1% from 3.26 million ounces a year ago.

2019 Highlights

For 2019, net income was $225.6 million or 24 cents per share against net loss of $284.6 million or 30 cents per share a year ago.

Revenues decreased 10.4% year over year to $1612.2 million.

Financial Position

Cash flows from operating activities were $201.7 million for the quarter, up from $114.8 million a year ago.

Net debt stood at $889.1 million at the end of 2019, down 46% year over year.

Outlook

The company expects to produce 857,000 ounces of gold and 11.5 million ounces of silver in 2020. Further, it anticipates producing 873,000 ounces of gold and 11 million ounces of silver in 2021.

Yamana Gold expects the completion of Jacobina’s Phase 1 optimization, development progress at several of its mines and ongoing exploration success at Cerro Moro to be the key catalysts for its 2022 production levels. Notably, the company expects to produce 885,000 ounces of gold and 10 million ounces of silver in 2022.

Total cost of sales is expected to be between $1,130 and $1,170 per gold equivalent ounces for 2020. AISC for gold is expected to be $980-$1020 per ounce for 2020.

Price Performance

Shares of Yamana Gold have gained 55.3% in the past year compared with the 38% growth of its industry.

 

 

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Daqo New Energy Corp. DQ, Sandstorm Gold Ltd SAND and Commercial Metals Company (CMC - Free Report) .

Daqo New Energy has a projected earnings growth rate of 353.7% for 2020. The company’s shares have rallied 137.1% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sandstorm Gold has an estimated earnings growth rate of 66.7% for fiscal 2020. It currently flaunts a Zacks Rank #1. The company’s shares have rallied 29.9% in a year.

Commercial Metals has a Zacks Rank #2 (Buy) and a projected earnings growth rate of 20.2% for 2020. The company’s shares have rallied 30.7% in a year.

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