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Fortuna Silver (FSM) to Report Q2 Earnings: What to Expect?
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Fortuna Silver Mines Inc. (FSM - Free Report) is expected to report an improvement in its bottom line when it reports second-quarter 2024 results on Aug 7, after market close.
The Zacks Consensus Estimate for FSM’s earnings has moved up 128.6% over the past 60 days and is pegged at 16 cents per share. The consensus mark indicates a significant 1500% year-over-year improvement from earnings of 1 cent per share reported in the second quarter of 2023.
Image Source: Zacks Investment Research
A Mixed Earnings Surprise History
Fortuna Silver’s earnings beat the Zacks Consensus Estimates in two of the trailing four quarters and missed twice. The company has a trailing four-quarter earnings surprise of 85.21%, on average. The trend is shown in the chart below.
Image Source: Zacks Investment Research
Factors Likely to Have Shaped Q2 Performance
Fortuna Silver recently provided second-quarter production update, which can indicate how it is likely to fare in the quarter. The company produced 116,570 gold equivalent ounces, which marked a 25% increase from the year-ago quarter.
This included gold production of 92,716 ounces and silver production of 990,574 ounces. While gold output marked a 44% year-over-year increase, silver production was down 22%.
The Séguéla mine, located in Côte d´Ivoire, contributed 32,983 ounces of gold. The mine had poured its first gold on May 24, 2023, and its total production for the second quarter of 2023 was 4,023 ounces.
The Yaramoko Mine in Burkina Faso produced 31,447 ounces of gold, up 8% year over year. Gold production at the Lindero mine in Argentina was 22,874 ounces, down 10% year over year. The San Jose mine in Mexico produced 684,176 ounces of silver (down 26%) and 5,269 ounces of gold (down 9%).
The Caylloma mine in Peru produced 306,938 ounces of silver, up 0.4% year over year. Gold output was 143 ounces compared with 89 ounces in the second quarter of 2023.
Zinc production was around 13 million pounds and lead production was 10.5 million pounds. Compared with the year-ago quarter, zinc and lead production declined 7% and 3%, respectively.
During the second quarter, gold prices averaged a record $2,338 an ounce, 18% higher year over year. Prices were supported by heightened geopolitical tensions, a weaker U.S. dollar, Asia investment flows, increasing speculation for monetary policy easing and ongoing central bank purchases. Silver prices in the second quarter have been 20% higher than the year-ago quarter’s average. Zinc and molybdenum prices were also higher than last year’s levels.
Higher gold production and elevated gold prices are expected to have boosted Fortuna Silver’s second-quarter top-line performance. The decline in silver and zinc production is likely to have been offset by higher silver and silver prices.
The cash cost of sales per gold equivalent ounce is expected to be lower due to the contribution of low-cost production from Séguéla and the declining cost of sales per ounce of gold at Yaramoko related to higher grades. This is expected to have been partially offset by higher cash costs per gold equivalent ounce at San Jose as previously capitalized costs are now being expensed as the mine is in its last year of operations. Also, higher cash cost per gold ounce is expected at Lindero related to lower planned head grades.
General and administrative expenses are expected to be higher due to the addition of expenses at Séguéla. Also, we expect higher interest expenses in the second quarter, reflecting capitalized interest expenses and increased accretion of right-of-use lease liabilities. The impact of these items on FSM’s earnings is expected to have been offset by higher realized prices for gold, silver and zinc in the quarter.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Fortuna Silver this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, but that is not the case here.
Earnings ESP: The Earnings ESP for FSM is 0.00%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank of 2.
Price Performance
Fortuna Silver’s shares have gained 41% in the past six months against the industry’s 4.9% decline.
Image Source: Zacks Investment Research
Stocks That Warrant a Look
Here are some companies in the basic materials space, which according to our model, have the right combination of elements to post an earnings beat this quarter:
The Zacks Consensus Estimate for GOLD’s earnings for the second quarter is pegged at 26 cents per share. It indicates year-over-year growth of 36.8%. The company has a trailing four-quarter earnings surprise of 18.3%, on average.
HudBay Minerals (HBM - Free Report) , slated to release earnings on Aug 13, has an Earnings ESP of +1.12% and a Zacks Rank of 3 at present.
The consensus mark for HBM’s second-quarter earnings is pegged at 6 cents per share. It indicates a substantial improvement from the loss of 7 cents per share reported in the second quarter of 2023. Hudbay Minerals has a trailing four-quarter earnings surprise of 39.9%, on average.
Osisko Gold Royalties (OR - Free Report) , expected to release second-quarter earnings next week, has an Earnings ESP of +2.04% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Osisko Gold’s earnings for the second quarter is pegged at 12 cents per share, indicating a year-over-year decline of 7.7%. OR has a trailing four-quarter earnings surprise of 6.6%, on average.
Image: Bigstock
Fortuna Silver (FSM) to Report Q2 Earnings: What to Expect?
Fortuna Silver Mines Inc. (FSM - Free Report) is expected to report an improvement in its bottom line when it reports second-quarter 2024 results on Aug 7, after market close.
The Zacks Consensus Estimate for FSM’s earnings has moved up 128.6% over the past 60 days and is pegged at 16 cents per share. The consensus mark indicates a significant 1500% year-over-year improvement from earnings of 1 cent per share reported in the second quarter of 2023.
A Mixed Earnings Surprise History
Fortuna Silver’s earnings beat the Zacks Consensus Estimates in two of the trailing four quarters and missed twice. The company has a trailing four-quarter earnings surprise of 85.21%, on average. The trend is shown in the chart below.
Image Source: Zacks Investment Research
Factors Likely to Have Shaped Q2 Performance
Fortuna Silver recently provided second-quarter production update, which can indicate how it is likely to fare in the quarter. The company produced 116,570 gold equivalent ounces, which marked a 25% increase from the year-ago quarter.
This included gold production of 92,716 ounces and silver production of 990,574 ounces. While gold output marked a 44% year-over-year increase, silver production was down 22%.
The Séguéla mine, located in Côte d´Ivoire, contributed 32,983 ounces of gold. The mine had poured its first gold on May 24, 2023, and its total production for the second quarter of 2023 was 4,023 ounces.
The Yaramoko Mine in Burkina Faso produced 31,447 ounces of gold, up 8% year over year. Gold production at the Lindero mine in Argentina was 22,874 ounces, down 10% year over year. The San Jose mine in Mexico produced 684,176 ounces of silver (down 26%) and 5,269 ounces of gold (down 9%).
The Caylloma mine in Peru produced 306,938 ounces of silver, up 0.4% year over year. Gold output was 143 ounces compared with 89 ounces in the second quarter of 2023.
Zinc production was around 13 million pounds and lead production was 10.5 million pounds. Compared with the year-ago quarter, zinc and lead production declined 7% and 3%, respectively.
During the second quarter, gold prices averaged a record $2,338 an ounce, 18% higher year over year. Prices were supported by heightened geopolitical tensions, a weaker U.S. dollar, Asia investment flows, increasing speculation for monetary policy easing and ongoing central bank purchases. Silver prices in the second quarter have been 20% higher than the year-ago quarter’s average. Zinc and molybdenum prices were also higher than last year’s levels.
Higher gold production and elevated gold prices are expected to have boosted Fortuna Silver’s second-quarter top-line performance. The decline in silver and zinc production is likely to have been offset by higher silver and silver prices.
The cash cost of sales per gold equivalent ounce is expected to be lower due to the contribution of low-cost production from Séguéla and the declining cost of sales per ounce of gold at Yaramoko related to higher grades. This is expected to have been partially offset by higher cash costs per gold equivalent ounce at San Jose as previously capitalized costs are now being expensed as the mine is in its last year of operations. Also, higher cash cost per gold ounce is expected at Lindero related to lower planned head grades.
General and administrative expenses are expected to be higher due to the addition of expenses at Séguéla. Also, we expect higher interest expenses in the second quarter, reflecting capitalized interest expenses and increased accretion of right-of-use lease liabilities. The impact of these items on FSM’s earnings is expected to have been offset by higher realized prices for gold, silver and zinc in the quarter.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Fortuna Silver this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, but that is not the case here.
Earnings ESP: The Earnings ESP for FSM is 0.00%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank of 2.
Price Performance
Fortuna Silver’s shares have gained 41% in the past six months against the industry’s 4.9% decline.
Image Source: Zacks Investment Research
Stocks That Warrant a Look
Here are some companies in the basic materials space, which according to our model, have the right combination of elements to post an earnings beat this quarter:
Barrick Gold Corporation (GOLD - Free Report) , scheduled to release earnings on Aug 12, has an Earnings ESP of +3.29% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GOLD’s earnings for the second quarter is pegged at 26 cents per share. It indicates year-over-year growth of 36.8%. The company has a trailing four-quarter earnings surprise of 18.3%, on average.
HudBay Minerals (HBM - Free Report) , slated to release earnings on Aug 13, has an Earnings ESP of +1.12% and a Zacks Rank of 3 at present.
The consensus mark for HBM’s second-quarter earnings is pegged at 6 cents per share. It indicates a substantial improvement from the loss of 7 cents per share reported in the second quarter of 2023. Hudbay Minerals has a trailing four-quarter earnings surprise of 39.9%, on average.
Osisko Gold Royalties (OR - Free Report) , expected to release second-quarter earnings next week, has an Earnings ESP of +2.04% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Osisko Gold’s earnings for the second quarter is pegged at 12 cents per share, indicating a year-over-year decline of 7.7%. OR has a trailing four-quarter earnings surprise of 6.6%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.