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Americas Gold (USAS) Q2 Earnings Meet, Shares Dip as Sales Miss

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Americas Gold and Silver ((USAS - Free Report) ) reported a loss of 3 cents per share in second-quarter 2023, which met the Zacks Consensus Estimate. The loss reported in the second quarter of 2023 was narrower than the loss of 4 cents per share in the prior-year quarter. The improvement in revenues was offset by the higher cost of sales and low realized zinc prices.

The company’s revenues improved 21% year over year to $24.2 million in the quarter under review. The upbeat performance was driven by higher silver revenues, offset by lower zinc and lead revenues.  The top line however missed the consensus estimate of $25 million.

Higher silver and lead production from the Galena Complex and increased silver production from the Cosalá Operations were partially offset by lower realized zinc prices in the quarter.

The company’s consolidated attributable silver production surged 92% year over year to around 0.57 million in the quarter under review. Consolidated attributable silver equivalent production for the quarter was approximately 1.3 million ounces, flat compared with the last year’s quarter.

Total cost of sales increased 16% year over year to $20.5 million in the second quarter. Americas Gold and Silver’s attributable cash costs were $10.00 per ounce of silver produced in the quarter. All-in sustaining costs were $16.78 per ounce of  silver produced during the quarter.

Americas Gold and Silver ended the second quarter of 2023 with $1.63 million of cash in hand, down from $1.96 million at the end of 2022.

The company used $4.3 million of cash in operating activities during the first six-month period of 2023 against an inflow of $5.1 million in the prior year’s comparable period. Cash flow was negatively impacted by a 17-day maintenance shutdown of the Cosalá Operations, ongoing capital costs for the Galena hoist project as well as a lower U.S. dollar to Mexican peso exchange rate. Fluctuations in commodity prices and inflationary pressures on certain operating and capital costs also adversely impacted cash flow during the period.

Guidance

USAS expects production in the second half of the year to be higher compared with the first half. It remains on track to meet its 2023 production guidance. Consolidated attributable silver is expected to be between 2.2 million ounces and 2.6 million ounces, indicating an 80% increase from 2022. Consolidated attributable silver equivalent production is likely to range between 5.5 million ounces and 6.0 million ounces.

Price Performance

Shares of the company have declined 22.3% over the past year compared with the industry’s 5.7% fall.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Zacks Rank & Stocks to Consider

Americas Gold and Silver currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , PPG Industries, Inc. (PPG - Free Report) and Bunge Limited (BG - Free Report) . CRS and PPG sport a Zacks Rank #1 (Strong Buy) at present, and BG has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Carpenter Technology has an average trailing four-quarter earnings surprise of 10%. The Zacks Consensus Estimate for CRS’s fiscal 2024 earnings is pegged at $3.23 per share. The consensus estimate for fiscal 2024 earnings has moved 12% north in the past 60 days. Its shares have gained 54% in the last year.

The Zacks Consensus Estimate for PPG Industries’ fiscal 2023 earnings per share is pegged at $7.47, indicating growth of 23.5% from the prior-year actual. Earnings estimates have moved 3% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 7.3%. PPG’s shares have gained 0.2% in the past year.

Bunge has an average trailing four-quarter earnings surprise of 20.4%. The Zacks Consensus Estimate for BG’s 2023 earnings is pegged at $12.13 per share. The consensus estimate for 2023 earnings has moved 4% north over the past 60 days. BG’s shares have gained 12% in the last year.

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