Pan American Silver Q2 Earnings Lag Estimates, Rise Y/Y

Pan American Silver Corp. PAAS reported adjusted earnings per share of 11 cents for second-quarter 2024, missing the Zacks Consensus Estimate of 15 cents. PAAS had posted adjusted earnings per share of 8 cents in the year-ago quarter.

Including one-time items, Pan American Silver reported a loss of 6 cents per share in the quarter compared with the year-ago quarter's loss of 9 cents.

PAAS's revenues improved 7.3% year over year to $686 million in the quarter under review. The top line beat the Zacks Consensus Estimate of $682 million. The average realized silver price in the quarter increased 20% year over year to $28.14 per ounce. The average realized gold price increased 18.3% year over year to $2,336 per ounce.

Operational Update

Silver production in the quarter was 4.57 million ounces, down 24.2% year over year. Gold production was 220.4 thousand ounces in the reported quarter, reflecting a year-over-year decline of 11.2%.

The Silver segment's cash costs were $14.49 per ounce in the second quarter, up 56% from the year-ago period. The segment's all-in sustaining costs (AISC) rose 21.5% year over year to $19.07 per ounce in the quarter.

The Gold segment's cash costs were $1,186 per ounce, reflecting a 13.5% increase from the year-ago quarter. The segment's AISC costs amounted to $1,584 per ounce in the April-June period, representing a year-over-year rise of 18%.

Pan American Silver reported mine-operating earnings of $117 million in the quarter compared with the $88 million reported in the prior-year quarter.

Financial Position

At the end of second-quarter 2024, Pan American Silver had cash and short-term investment balances of $368.6 million. It has $750 million available in its revolving credit facility. Total debt amounted to $809.5 million. Net cash generated from operations was $163 million in the second quarter compared with $117 million in the prior-year period.

Guidance

PAAS reaffirmed its production guidance for 2024. The silver production is expected between 21 million and 23 million ounces. The company expects gold production between 880,000 ounces and 1000,000 ounces.

The Silver segment's AISC per ounce is estimated between $16.00 and $18.50. The Gold segment's AISC per ounce is forecast between $1,475 and $1,575.

Price Performance

PAAS shares have gained 24.2% in the past year compared with the industry's growth of 26.3%.

Image Source: Zacks Investment Research

Zacks Rank

Pan American Silver currently carries a Zacks Rank #3 (Hold).

How Did PAAS' Peers Fare in Q2?

Hecla Mining HL reported earnings per share of 2 cents in the second quarter, beating the Zacks Consensus Estimate of 1 cent. The bottom line moved down 33% from the year-ago quarter.

Hecla Mining witnessed a 38% increase in revenues to $246 million, which beat the consensus estimate of $209 million. The company reported 4.5 million ounces of silver production in the second quarter of 2024. This marked a 16% year-over-year improvement, reflecting a solid performance at Keno Hill.

Buenaventura Mining BVN posted earnings per share of 28 cents in the second quarter, missing the Zacks Consensus Estimate of earnings of 34 cents. BVN had reported a loss of 3 cents per share in the year-ago quarter.

The company witnessed a 60% year-over-year increase in revenues to $277 million, which beat the consensus estimate of $252 million.

Mining - Silver Stock Awaiting Results

Avino Silver ASM, scheduled to release second-quarter 2024 earnings on Aug 13, has a four-quarter trailing average negative surprise of 50%.

The Zacks Consensus Estimate of ASM's earnings is pegged at 2 cents. The company posted break-even results in the second quarter of 2023. The consensus estimate for revenues is pegged at $13.05 million, indicating an increase of 46.4% from the year-ago quarter's reported number.

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