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Agnico Eagle (AEM) Tops Q2 Earnings & Sales, Ups Dividend

Published 08/02/2016, 07:03 AM
Updated 07/09/2023, 06:31 AM

Agnico Eagle Mines Limited (NYSE:AEM) reported a net income of $19 million or 9 cents per share in the second quarter of 2016, compared with net income of $10.1 million or 5 cents per share recorded in the year-ago quarter.

Adjusted earnings came in at 13 cents per share in the second quarter, exceeding the Zacks Consensus Estimate of 12 cents.

Shares of the company rose 3.4% to close at $56.54 on Jul 28.

Revenues and Operational Highlights

Agnico Eagle registered revenues of $537.6 million in second-quarter 2016, up 5.4% from $510.1 million in the year-ago quarter. The figure also beat the Zacks Consensus Estimate of $497 million.

Payable gold production in the second quarter increased 1.3% year over year to 408,932 ounces. The rise in production is attributable to increased grades at LaRonde, higher throughput and grades at Goldex, and higher throughput levels at Canadian Malartic.

For the reported quarter, total cash costs per ounce of gold produced on a by-product basis were $592, lower than $601 a year ago due to higher production levels of silver, higher production of gold at almost all mines of the company as well as a stronger U.S. dollar compared to Canadian and Mexican local currencies.

All in sustaining costs (“AISC”) for the quarter were $848 per ounce on a by-product basis, down from $864 in the prior-year quarter. The lower AISC is mainly due to lower total cash costs per ounce on a by-product basis, higher production and timing of capital expenditure compared to second-quarter 2015.

In the reported quarter, Agnico Eagle received the final license required to begin construction at the Meliadine Gold project. The decision to build the mine is subject to the approval of the company’s board of directors.

Financial Position

Agnico Eagle ended the second quarter of 2016 with cash and cash equivalents of $467.9 million, up 195.6% from $158.3 million in the second quarter of 2015. Long-term debt increased 44.3% to $1,702.8 million as of Jun 30, 2016, from $1,180.3 million as of Jun 30, 2015.

The outstanding balance on Agnico Eagle’s $1.2 billion credit facility reduced to nil as of Jun 30, 2016, from $210 million as of Mar 31, 2015. This resulted in available credit lines of around $1.2 billion, excluding the $300 million accordion facility.

Total capital expenditures in the reported quarter were $131.6 million.

Dividend

Agnico Eagle's board announced a quarterly cash dividend of 10 cents per share, up 25% from the prior payout of 8 cents. The dividend is payable on Sep 15, to shareholders on record as of Sep 1, 2016.

Outlook

Agnico Eagle has raised its full-year production outlook and now expects production for 2016 in the range of 1.58−1.6 million ounces of gold (up from the earlier view of 1.565 million ounces), with total cash costs per ounce on a by-product basis in the range of $580–$620 and AISC in the band of $840–$880 per ounce.

AGNICO EAGLE Price, Consensus and EPS Surprise

AGNICO EAGLE Price, Consensus and EPS Surprise | AGNICO EAGLE Quote

Zacks Rank

Agnico Eagle currently sports a Zacks Rank #1 (Strong Buy).

Some other equally ranked mining companies include AngloGold Ashanti Ltd. (NYSE:AU) , B2Gold Corp. (NYSE:BTG) and IAMGOLD Corp. (TO:IAG) .



ANGLOGOLD LTD (AU): Free Stock Analysis Report

AGNICO EAGLE (AEM): Free Stock Analysis Report

IAMGOLD CORP (IAG (LON:ICAG)): Free Stock Analysis Report

B2GOLD CORP (BTG): Free Stock Analysis Report

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