It has been about a month since the last earnings report for Agnico Eagle Mines (AEM). Shares have lost about 12.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Agnico 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 Beats Earnings and Sales Estimates in Q2
Agnico Eagle reported net income of $189.6 million or 77 cents per share in second-quarter 2021 compared with $105.3 million or 43 cents per share reported in the year-ago quarter.
Barring one-time items, adjusted earnings per share came in at 68 cents, surpassing the Zacks Consensus Estimate of 58 cents per share
The company generated revenues of $966.3 million, up 73.4% year over year. The figure topped the Zacks Consensus Estimate of $901.4.
Operational Highlights
Payable gold production was up 58.9% year over year to 526,006 ounces in the reported quarter. The figure includes gold production at Hope Bay. Total cash costs per ounce for gold were $748, down 9.3% year over year.
All-in sustaining costs (AISC) were $1,037 per ounce in the quarter, including Hope Bay.
Financial Position
Agnico Eagle ended the quarter with cash and cash equivalents of $277.7 million compared with $126.5 million as of Mar 31, 2021. Long-term debt was around $1,441.5 million as of Jun 30, 2021 compared with $1,565.8 million as of Mar 31, 2021.
Total cash from operating activities amounted to $406.9 million in the second quarter, up 150.2% year over year.
Outlook
The company expects gold production for 2021 to be 2,047,500 ounces. It also expects total cash costs per ounce of $700-$750 and AISC of $950-$1,000 per ounce for 2021.
The quarterly production guidance for Hope Bay is 18,000-20,000 ounces of gold at total cash costs per ounce of $950-$975 and AISC per ounce of $1,525-$1,575.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Agnico has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Agnico has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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