First Majestic (AG) Q2 Earnings Miss Estimates, Improve Y/Y


First Majestic Silver Corp.’s (AG Quick QuoteAG ) second-quarter 2021 adjusted earnings per share of 5 cents, missed the Zacks Consensus Estimate of 9 cents by a margin of 44%. The company had reported a loss of 10 cents per share in the second quarter of 2020. The year-over-year improvement in earnings was primarily driven by higher metal prices in the quarter. As the company had to temporarily suspend operating activities in the last-year quarter in response to the COVID-19 pandemic, it resulted in year-over-year improved figures in the second quarter of 2021.

Including one-time items, the company delivered earnings of 6 cents per share in the second quarter against loss per share of 5 cents in the year-earlier quarter.

First Majestic’s revenues improved 53% year over year to a record $154 million in the quarter under review on improved production rates and higher metal prices. The company had reported revenues of $35 million in the year-ago quarter. Average realized silver price was up 58% year over year to $27.32 in the quarter. The company reported a 199% increase in payable silver equivalent ounces sold, due to a temporary suspension of operations mandated by the Mexican government in response to COVID-19 in the second quarter of 2020.

First Majestic Silver Corp. Price, Consensus and EPS Surprise First Majestic Silver Corp. Price, Consensus and EPS Surprise

First Majestic Silver Corp. price-consensus-eps-surprise-chart | First Majestic Silver Corp. Quote

Operational Update

First Majestic produced 6,435,023 silver equivalent ounces, up 84% from the prior-year quarter. This comprised 3.3 million ounces of silver and 46,544 ounces of gold.

The company recorded cash costs per silver equivalent ounce of $13.89, up 79% from the year-ago quarter. Consolidated all-in sustaining costs (AISC) of $19.42 per silver equivalent ounce came in 39% higher than the prior-year quarter. Total production cost was $104.94 per ton, up 33% year over year.

First Majestic reported mine-operating profit of $29.4 million in the quarter, versus a loss of $7.8 million in the year-ago quarter. This was driven by strong production and higher realized metal prices.

Financial Position

First Majestic ended second-quarter 2021 with $227 million of cash in hand, up from the $95 million held at the end of the prior-year period. Operating cash flow before movements in working capital and taxes were $51.2 million in the reported quarter compared with the prior-year quarter’s outflow of $16.4 million.

At the end of the second quarter, the company had total liquidity of $316.3 million, including $40 million of undrawn revolving credit facility.

First Majestic announced that its board of directors has declared a cash dividend payment of 0.06 cents per share, which marks a 33% increase from its prior dividend. The dividend will be paid on or about September 16, 2021 to shareholders of record on Aug 26, 2021.

Price Performance

Shares of the company have gained 5.1% over the past year against the industry’s decline of 22.2%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank & Stocks to Consider

First Majestic currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space include Avient Corporation (AVNT Quick QuoteAVNT ) , Veritiv Corporation (VRTV Quick QuoteVRTV ) and Commercial Metals Company (CMC Quick QuoteCMC ) . While Avient and Veritiv flaunt a Zacks Rank #1 (Strong Buy), Commercial Metals carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Avient has a projected earnings growth rate of 75% for 2021. The company’s shares have soared 92% in the past year.

Veritiv has an estimated earnings growth rate of 215% for the current year. Over the past year, the company’s shares have soared 350%.

Commercial Metals has an expected earnings growth rate of 32.8% for the current fiscal year. The company’s shares have gained 59% in a year’s time.

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