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Wheaton (WPM) Q3 Earnings & Sales Miss Estimates, Down Y/Y

Wheaton's (WPM) top line declines due to a reduction in average realized gold equivalent price and lower number of gold equivalent ounces sold in Q3.

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This story originally appeared on Zacks

Wheaton Precious Metals Corp. WPM reported adjusted earnings per share of 30 cents in third-quarter 2021, missing the Zacks Consensus Estimate of 33 cents. The bottom-line figure declined 10.1% year over year.

The company generated revenues of $269 million during the reported quarter, down 12.5% on a year-over-year basis. The downside resulted from a 4% decline in the average realized gold equivalent price and a 9% fall in the number of gold equivalent ounces sold. The top line also missed the Zacks Consensus Estimate of $300 million.

Wheaton’s gold production was 85,941 ounces, down from the prior-year quarter’s 90,500 ounces. Attributable silver production increased 6.1% year over year to 6,394 ounces, while palladium production declined 6.2% to 5,105 ounces. The company sold 152,432 GEOs during the September-end quarter, 8.5% down from the prior-year quarter’s 166,611 GEOs.

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Wheaton Precious Metals Corp. Price, Consensus and EPS Surprise

 

Wheaton Precious Metals Corp. Price, Consensus and EPS Surprise

Wheaton Precious Metals Corp. price-consensus-eps-surprise-chart | Wheaton Precious Metals Corp. Quote

 

Prices

In third-quarter 2021, the average realized gold price was $1,795 per ounce. The figure was 6% lower than the year-ago quarter’s figure. Silver prices averaged $26.80 per ounce in the reported quarter, up 8.5% year on year. Palladium prices increased 11.2% year over year to $2,426 per ounce.

Financial Position

The company had $372 million of cash in hand at the end of third-quarter 2021 compared with $193 million at the end of 2020. It recorded an operating cash flow of $201 million in the third quarter compared with the prior-year quarter’s $228 million. The company fully paid a revolving credit facility of $2 billion.

During the third quarter, the company announced a quarterly dividend of 15 cents per share, reflecting an increase of 25% from the year-ago quarter.

Guidance

Wheaton’s attributable production is estimated between 735,000 GEOs and 765,000 GEOs for the current year. Gold production is expected in the band of 330,000-345,000 ounces. Silver production is projected between 25.5 million ounces and 26.5 million ounces, while production of other metals is anticipated in the band of 45,000-55,000 GEOs.

Price Performance

Shares of Wheaton have lost 11.2%, over the past year, as against the industry’s growth of 13.1%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Zacks Rank & Stocks to Consider

Wheaton currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Olin Corporation OLN, Nucor Corporation NUE and Bunge Limited BG. All of these stocks currently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Olin has an expected earnings growth rate of around 740% for the current fiscal year. The company’s shares have surged 229% in the past year.

Nucor has a projected earnings growth rate of around 583% for 2021. The company’s shares have soared 128% in a year’s time.

Bunge has an estimated earnings growth rate of around 26% for the current year. The company’s shares have appreciated 60% in the past year.



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