First Majestic (AG) Missed Fourth Quarter Results, Revenue Improves Year-over-Year – March 11, 2022

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First Majestic Silver Corp.’s (HER Free Report) fourth-quarter 2021 adjusted earnings per share of 2 cents missed Zacks’ consensus estimate of 7 cents by a margin of 71%. The company had reported earnings of 11 cents per share in the prior year quarter.

Including one-time items, the company posted a loss of 2 cents per share in the reported quarter compared to earnings per share of 16 cents in the prior year quarter.

First Majestic’s revenue rose 75% year-over-year to a record $205 million in the quarter under review on strong production numbers.

The average realized silver price was $24.18 per payable silver equivalent ounce during the quarter, down 2.8% year-over-year.

Total production in the fourth quarter of 2021 reached a record 8.6 million silver equivalent ounces, consisting of 3.4 million ounces of silver and 67,411 ounces of gold. Total production during the prior year quarter was 5.5 million silver equivalent ounces, comprising 3.5 million ounces of silver and 26,343 ounces of gold.

Operational update

The company recorded cash costs per silver equivalent ounce of $12.32, up 89% from the prior year quarter. Consolidated all-in sustaining costs (AISC) of $17.26 per silver equivalent ounce increased 8% from the prior year quarter.

First Majestic reported mining operating profit of $40.4 million in the quarter, compared to $43.7 million in the year-ago quarter.

Financial situation

First Majestic ended 2021 with $238 million in cash on hand, consistent with the prior year’s period end. Cash flow from operations before working capital movements and taxes was $177 million in 2021, compared to $107 million the prior year.

Fiscal 2021 performance

First Majestic announced adjusted EPS of 2 cents in 2021, compared to 18 cents the previous year. The gains missed the Zacks consensus estimate by 10 cents. Including one-time items, the company posted a loss of 2 cents in 2021 compared to a profit of 11 cents the previous year.

Sales jumped 61% year over year to a record $584 million. The top line topped Zacks’ consensus estimate of $575 million. This increase is attributable to the acquisition of the Jerritt Canyon gold mine last year and a 19% increase in the average realized price of silver.

First Majestic produced 12.8 million silver equivalent ounces in 2021, which fell short of the lower end of the company’s guidance range of 13.0 to 13.8 million ounces silver. Gold production was 192,353 ounces, at the upper end of the company’s guidance range of 181,000 to 194,000 ounces. This strong performance was mainly due to the processing of Ermitaño ore at the Santa Elena mill and strong silver and gold grades at San Dimas in the fourth quarter.

Price performance

Image source: Zacks Investment Research

Shares of the company have fallen 18.6% over the past year versus a 19.5% decline for the industry.

Zacks Ranking and Stocks to Consider

First Majestic is currently carrying a Zacks rank #5 (strong sale).

Some top-ranked stocks in the base materials space are The Mosaic Company (MOS free report), AdvanSix Inc. (AT SIX free report) and Allegheny Technologies Incorporated (ATI free report).

Mosaic forecasts a profit growth rate of 106.4% for the current year. The Zacks consensus estimate for MOS earnings for the current year has been revised up 22.2% in the past 60 days.

Mosaic has beaten the Zacks consensus estimate for earnings in three of the past four quarters and missed once, with the average surprise being 3.7%. The MOS rebounded about 87.3% in one year. It currently sports a Zacks rank #1 (Strong Buy). You can see the full list of today’s Zacks #1 Rank stocks here.

AdvanSix forecasts a profit growth rate of 20.8% for the current year. The Zacks consensus estimate for ASIX earnings for the current year has been revised up 15.7% in the past 60 days.

AdvanSix has beaten the Zacks consensus estimate for earnings in three of the last four quarters, while falling short once, with the average surprise at 23.6%. ASIX jumped 57.3% in one year. The company currently carries a Zacks Rank #1.

Allegheny, which currently holds a Zacks rank of No. 2 (buy), has an expected earnings growth rate of 661.5% for the current year. The Zacks consensus estimate for ATI’s earnings for the current year has been revised up 45.6% in the past 60 days.

Allegheny has beaten the Zacks consensus estimate for earnings in each of the past four quarters, with the average surprise at 127.2%. ATI rebounded around 21.3% year-on-year.

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