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Agnico Eagle (AEM) Down 13.4% Since its Last Earnings Report

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It has been about a month since the last earnings report for Agnico Eagle Mines Limited (AEM - Free Report) . Shares have lost about 13.4% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is AEM due for a breakout? 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 Tops on Q4 Earnings, Ups Production View

Agnico Eagle reported net income of $35.1 million or 15 cents per share in the fourth quarter of 2017, down from the year-ago quarter’s net income of $62.7 million or 28 cents.

Barring one-time items, earnings for the quarter were 21 cents per share, which surpassed the Zacks Consensus Estimate of 19 cents.

Agnico Eagle recorded revenues of $565 million in the fourth quarter of 2017, up about 13.2% from $499 million in the year-ago quarter. The figure however, missed the Zacks Consensus Estimate of $566 million.

Full-Year 2017 Results

For 2017, the company posted profits of $243.9 million or $1.05 per share, up 53.6% from a net income of $158.8 million or 70 cents a year ago. Additionally, Agnico Eagle reported revenues of $2.2 billion in 2017, up around 4.9% from $2.1 billion in 2016.

Operational Highlights

Payable gold production in the fourth quarter fell 3.1% year over year to 413,212 ounces from 426,433 ounces in the year-ago quarter.

Total cash costs per ounce for the fourth quarter were $592, up 7.2% from the prior-year quarter figure of $552.

AISC was $905 for the fourth quarter, 8.8% higher compared to the prior-year quarter figure of $832.  This is mainly due to higher total cash costs and increased sustaining capital spending.

Financial Position

As of Dec 31, 2017, cash and cash equivalents were around $643.9 million, up 17.4% from year-ago quarter.

Long-term debt was $1,371.9 million at the end of 2017, up 27.9% from $1,072.8 million a year ago.

There was no outstanding balance on credit facility as of Dec 31, 2017. This resulted in available credit lines of roughly $1.2 billion, excluding the uncommitted $300 million accordion feature.

Total capital expenditure in the fourth quarter was $236.6 million.

Outlook

Agnico Eagle expects total cash costs for full-year 2018 to be in the range of $625-$675 per ounce.

AISC is expected in the range of $890-$940 per ounce for 2018. AISC is expected to be higher this year than 2017 as a result of lower production and higher total cash costs.

The company increased production guidance for 2018 and now anticipates production to be 1.53 million ounces of gold, compared with the previous guidance of 1.5 million ounces.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.

VGM Scores

At this time, AEM has a subpar Growth Score of D, though it is lagging a bit on the momentum front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

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

The company's stock is suitable solely for value, based on our styles scores.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of this revision indicates a downward shift. Interestingly, AEM has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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