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Yamana Gold (AUY) Post Loss in Q1, Revenues Miss Estimates
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Yamana Gold reported a net loss from continuing operations of $5.9 million or a penny per share for first-quarter 2017, as against the year-ago profit of $36 million or 4 cents. Analysts polled by Zacks were expecting earnings of 2 cents on average for the quarter.
Revenues inched up 0.6% year over year to $403.5 million in the reported quarter, but missed the Zacks Consensus Estimate of $415 million.
Cost of sales was $238 million in the reported quarter, up 9.6% from $217.1 million a year ago.
Yamana Gold Inc. Price, Consensus and EPS Surprise
Total gold production was 257,533 ounces in the reported quarter, down 9.2% from 283,757 ounces a year ago. Total of cost of sales for gold rose roughly 12.1% year over year to $1,052 per ounce in the first quarter. All-in sustaining costs (AISC) increased to $936 per ounce in the reported quarter from $787 per ounce a year ago.
Total silver production was 1.08 million ounces in the reported quarter, down 40% from 1.80 million ounces a year ago. Total of cost of sales for silver rose roughly 25.5% year over year to $15.14 per ounce in the first quarter. AISC increased to $14.24 per ounce in the reported quarter from $10.43 per ounce a year ago.
Total copper production was 26.5 million pounds in the reported quarter, up 2.3% from 25.9 million pounds a year ago. Total cost of sales for copper fell marginally year over year to $1.81 per pound in the first quarter. AISC increased to $2.13 per ounce from $1.85 per ounce a year ago.
Financial Position
Cash flows from operating activities (after considering the net changes in working capital) were $51.3 million, down roughly 55.8% year over year.
Long term debt fell 1.3% year over year to $1,595 million in the reported quarter.
Outlook
The company has grown over the years through strategic mergers and acquisitions which have helped it to upgrade its portfolio along with pursuing organic growth. Yamana Gold is currently in organic growth phase, whereby its focus remains on exploring internal opportunities.
Yamana Gold will remain focused on six production mines. It has revised the annual production guidance for gold to 940,000 ounces for 2017. The production of gold is expected to increase in 2018 and 2019 due to higher production at Chapada and new production from Cerro Moro. Higher productivity and increasing grades at several operations including Chapada, El Penon, Canadian Malartic, Jacobina and Cerro Moro, will help to lower the cost of production from 2017 levels into 2018 and 2019.
Cost of sales applicable to gold has been forecast in the range of $945–$965 per ounce for 2017. The company forecasts AISC of $890–$910 per ounce for gold in 2017.
Cost of sales applicable to silver has been forecast to be $14.2 per ounce for the year. The company expects silver AISC of $14.30 per ounce in 2017.
Cost of sales applicable to copper (Chapada) is expected to be around $1.7 per pound for the year. The company expects AISC of $2 per pound for copper this year.
The company also plans to cut net debt by at least $300 million by the end of 2017.
Price Performance
Yamana Gold’s shares have declined 26% in the last three months, underperforming the Zacks categorized Mining–Gold industry’s loss of 12.3%.
Zacks Rank & Key Picks
Yamana Gold currently carries a Zacks Rank #3 (Hold).
Kronos has an expected long-term earnings growth of 5%.
Akzo Nobel has an expected long-term earnings growth of 11.1%.
ArcelorMittal has an expected long-term earnings growth of 11.5%.
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Yamana Gold (AUY) Post Loss in Q1, Revenues Miss Estimates
Yamana Gold reported a net loss from continuing operations of $5.9 million or a penny per share for first-quarter 2017, as against the year-ago profit of $36 million or 4 cents. Analysts polled by Zacks were expecting earnings of 2 cents on average for the quarter.
Revenues inched up 0.6% year over year to $403.5 million in the reported quarter, but missed the Zacks Consensus Estimate of $415 million.
Cost of sales was $238 million in the reported quarter, up 9.6% from $217.1 million a year ago.
Yamana Gold Inc. Price, Consensus and EPS Surprise
Yamana Gold Inc. Price, Consensus and EPS Surprise | Yamana Gold Inc. Quote
Operational Highlights
Total gold production was 257,533 ounces in the reported quarter, down 9.2% from 283,757 ounces a year ago. Total of cost of sales for gold rose roughly 12.1% year over year to $1,052 per ounce in the first quarter. All-in sustaining costs (AISC) increased to $936 per ounce in the reported quarter from $787 per ounce a year ago.
Total silver production was 1.08 million ounces in the reported quarter, down 40% from 1.80 million ounces a year ago. Total of cost of sales for silver rose roughly 25.5% year over year to $15.14 per ounce in the first quarter. AISC increased to $14.24 per ounce in the reported quarter from $10.43 per ounce a year ago.
Total copper production was 26.5 million pounds in the reported quarter, up 2.3% from 25.9 million pounds a year ago. Total cost of sales for copper fell marginally year over year to $1.81 per pound in the first quarter. AISC increased to $2.13 per ounce from $1.85 per ounce a year ago.
Financial Position
Cash flows from operating activities (after considering the net changes in working capital) were $51.3 million, down roughly 55.8% year over year.
Long term debt fell 1.3% year over year to $1,595 million in the reported quarter.
Outlook
The company has grown over the years through strategic mergers and acquisitions which have helped it to upgrade its portfolio along with pursuing organic growth. Yamana Gold is currently in organic growth phase, whereby its focus remains on exploring internal opportunities.
Yamana Gold will remain focused on six production mines. It has revised the annual production guidance for gold to 940,000 ounces for 2017. The production of gold is expected to increase in 2018 and 2019 due to higher production at Chapada and new production from Cerro Moro. Higher productivity and increasing grades at several operations including Chapada, El Penon, Canadian Malartic, Jacobina and Cerro Moro, will help to lower the cost of production from 2017 levels into 2018 and 2019.
Cost of sales applicable to gold has been forecast in the range of $945–$965 per ounce for 2017. The company forecasts AISC of $890–$910 per ounce for gold in 2017.
Cost of sales applicable to silver has been forecast to be $14.2 per ounce for the year. The company expects silver AISC of $14.30 per ounce in 2017.
Cost of sales applicable to copper (Chapada) is expected to be around $1.7 per pound for the year. The company expects AISC of $2 per pound for copper this year.
The company also plans to cut net debt by at least $300 million by the end of 2017.
Price Performance
Yamana Gold’s shares have declined 26% in the last three months, underperforming the Zacks categorized Mining–Gold industry’s loss of 12.3%.
Zacks Rank & Key Picks
Yamana Gold currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the basic materials space include Kronos Worldwide Inc (KRO - Free Report) , Akzo Nobel NV (AKZOY - Free Report) and ArcelorMittal (MT - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Kronos has an expected long-term earnings growth of 5%.
Akzo Nobel has an expected long-term earnings growth of 11.1%.
ArcelorMittal has an expected long-term earnings growth of 11.5%.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>