Silver Wheaton, Pan American Hammered by Low Silver and Gold Prices

Commodities & Metals

Published: August 14, 2014 7:24 am

Last Updated: April 28, 2020 4:55 am

Silver futures traded at around $19.85 on Wednesday afternoon, down from their 52-week high of $25.11 and not much above the 52-week low of $18.65. Low prices coupled with still-high costs typically mean lower operating profits — and that is what we saw from two silver companies.

Silver streamer Silver Wheaton Corp. (NYSE: SLW) posted earnings per share (EPS) after markets closed on Wednesday of $0.18 on revenues of $148.57 million. The company was expected to post EPS of $0.24 on revenues of $185.96 million. In the same quarter a year ago, the company posted EPS of $0.20 on revenues of $166.89 million.

Silver Wheaton reported cash costs of $4.72 per silver equivalent ounce, down from $4.77 in the second quarter a year ago. The silver equivalent realized price fell from $23.05 per ounce a year ago to $19.83 this year. Gold sales accounted for about 30% of Silver Wheaton’s sales, and the company’s realized gold price of $1,295 per ounce was included in a 14% drop in the silver equivalent price.

Shares closed at $27.18 on Wednesday and were trading down 1.8% at $26.69 in Thursday’s pre-market session. The stock’s 52-week range is $19.23 to $29.17

Pan American Silver Corp. (NASDAQ: PAAS) said it posted adjusted EPS of $0.01 per share on revenues of $200.8 million. In the second quarter a year ago, the company posted a loss of $0.07 per share on sales of $175.58 million. The consensus estimates called for EPS of $0.03 on revenues of $195.91 million.

Including a $10 million charge to inventory values and “abnormally high” income tax expense, Pan American posted a net loss of $0.04 per share. The company’s consolidated cash costs per ounce of silver came to $12.06 and the company’s average realized price for silver during the second quarter was $19.58 per ounce, down from $22.68 in the year ago quarter. Gold, which accounts for about 25% of Pan American’s sales, also suffered from tumbling prices. A year ago, gold fetched $1,423 per ounce compared with $1,289 in the second quarter this year.

Pan American’s shares closed at $15.11 Wednesday night and are trading down about 0.7% Thursday morning at $15.00. The stock’s 52-week range is $9.78 to $15.97.

ALSO READ: World Gold Council Sees Gold Staging a Comeback

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