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First Majestic (AG) to Post Q4 Earnings: What to Expect?

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First Majestic Silver Corp. AG is slated to report fourth-quarter fiscal 2019 results on Feb 19, before the opening bell.

Q4 Estimates

The Zacks Consensus Estimate for First Majestic Silver’s fourth-quarter earnings is currently pegged at 6 cents. This suggests a turnaround from a loss of 5 cents per share reported in the prior-year quarter. The Zacks Consensus Estimate for revenues is currently pegged at $103 million, indicating an improvement of 39% from the prior-year quarter.

A Sneak Peek at Q3

In the last reported quarter, First Majestic Silver’s adjusted earnings per share of 6 cents missed the Zacks Consensus Estimate of 7 cents. The bottom line also marked an improvement from the loss of 3 cents per share incurred in the comparable year-ago quarter.

In the trailing four quarters, the company has missed the consensus mark on three occasions, while matching the same once. It has a trailing four-quarter negative surprise of 34.8%, on average.

First Majestic Silver Corp. Price and EPS Surprise

What to Expect

Per First Majestic Silver’s fourth-quarter operational update, the company’s total production was 6.2 million equivalent ounces of silver, reflecting a decline of 6% from the prior-year quarter. This can primarily be attributed to lower gold grades and reduction in tons milled at Santa Elena in the month of December on account of heavy rains impacting the ability to produce from the heap leach pads.

Silver production came in at 3.3 million ounces in the quarter under review, flat with the prior quarter. During the quarter, San Dimas mine produced 1,658,721 ounces of silver and 21,713 ounces of gold for a total production of 3,516,117 silver equivalent ounces, consistent compared with the prior quarter.

Production from the La Encantada mine increased 12% year over year to 987,630 silver ounces — a five-year quarterly production record. The increase was primarily owing to a 15% increase in throughput compared with the previous quarter.

During the quarter, Santa Elena produced 619,321 ounces of silver and 11,391 ounces of gold for a total production of 1,592,397 silver equivalent ounces, reflecting a decline of 14% compared with the prior quarter. The decrease was primarily due to a 14% decrease in tons milled owing to heavy rains during the month of December.

Despite overall lower production, the company’s top line is likely to have benefited from higher silver prices in the fourth quarter. Silver prices improved during the fourth quarter, courtesy of the uncertainties related to the prolonged trade war, concerns regarding global economic growth and the Fed’s rate cuts. Notably, average silver prices in the fourth quarter of 2019 were around $17 per ounce, compared with $14 in the prior year quarter. Further, lower costs are likely to have driven the company’s margins in the to-be-reported quarter.

Earnings Whispers

Our proven model predicts an earnings beat for First Majestic Silver this time around. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive earnings surprise.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

First Majestic Silver has an Earnings ESP of +8.33% and a Zacks Rank #3.

Price Performance

First Majestic Silver’s shares have gained 45.3% in the past year, compared with the industry’s growth of 11%.

Other Stocks That Warrant a Look

Here are some other stocks which you may consider as our model shows that these too have the right combination of elements to post an earnings beat in their upcoming releases:

Berry Petroleum Corporation BRY has an Earnings ESP of +2.50% and a Zacks Rank of 1. You can see the complete list of today's Zacks #1 Rank stocks here.

Eldorado Gold Corporation EGO has a Zacks Rank #3 and an Earnings ESP of +23.81%.

AK Steel Holding Corporation , a Zacks Ranked #3 stock, has an Earnings ESP of 11.11%.

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