Monday, May 17, 2021

Despite $202M in revenue, Coeur Mining shares fall nearly 15%

| April 30, 2021 12:00 PM

Despite first quarter revenue of $202.1 million, Coeur Mining’s shares fell nearly 15% on Thursday.

When the stock market closed, Coeur Mining was at $8.23 a share, down $1.38, or a 14.36% decline.

“Investors are clearly not pleased, but it requires a little extra digging to see why,” wrote Reuben Gregg Brewer with Motley Fool, which offers market analysis and advice.

“At first blush, Coeur's numbers weren't so bad,” Brewer wrote.

He noted that first-quarter 2021 revenue was up significantly from $128 million in the prior-year period. Gold sales rose 8% and silver sales jumped 42%.

The realized gold price increased about 11.5% and production was basically flat, Brewer wrote. The realized silver price "soared a massive 57%, helping to offset a production drop of roughly 11%."

Net income per share came in at $.01 compared to a $0.05-per-share loss in the year-ago period.

“All in, that sounds pretty positive,” Brewer wrote.

He went on to explain that “The problem is that most of the first-quarter results compared unfavorably with Coeur's Q4 performance.”

Net income dropped from $.05 per share in the fourth quarter of 2020 to $.01 per share. The adjusted net income figure of $.06 per share represented a decline of 25% from Q4.

“Meanwhile, Wall Street had been expecting net income of $.08 per share,” Brewer wrote. “So the quarterly performance maybe wasn't quite as good as it seemed at first, which makes the stock's slump a lot less surprising.”

In a Thursday press release, Coeur Mining reported Earnings Before Interest, Taxes, Depreciation, and Amortization of $65.9 million, cash flow from operating activities before changes in working capital of $41.6 million and net income from continuing operations of $13.9 million, or $.06 per share.

“Higher margins helped drive a stronger start to the year — Coeur’s first quarter results reflect a strong start to the year led by solid production and higher prices,” the release stated.

It added that the company’s gold production of 85,225 ounces exceeded expectations for the quarter, “tracking well towards its full-year guidance range.”

Mitchell J. Krebs, president and chief executive officer, said their first quarter results were in-line with expectations driven by strong gold production performance across their portfolio of assets.

“Additionally, we achieved an important milestone by commencing major construction on the expansion of our Rochester mine in Nevada,” he said in the press release. “The project remains on track and is expected to be largely completed by late next year, helping to drive an anticipated step change in production and cash flow.”

On the exploration front, Krebs said Coeur Mining is seeing early encouraging results as it executes on the largest drilling campaign in company history.

“We are confident in our ability to maximize cash flow, returns and net asset value for our stockholders,” he wrote.

Hecla Mining Company’s shares, meanwhile, closed Thursday at $6.03, down 42 cents, or a decline of 6.51%.
 Hecla, which is headquartered in Coeur d’Alene, announced Thursday it will issue a news release reporting its first quarter 2021 financial results by May 6.

“Hecla Mining is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended March 2021,” according to Zacks Equity Research at

Zacks consensus estimate was that Hecla is expected to post quarterly earnings of $.05 per share in its upcoming report, which represents a year-over-year change of +266.7%. Revenues are expected to be $211.07 million, up 54.1% from the year-ago quarter.

Regarding Coeur Mining’s outlook Brewer wrote: “Coeur is also ramping up its capital spending as it looks to develop a large new project, which means there's extra money going out the door right now. It's good news that it is facing these costs at a time when gold and silver prices are relatively high, but it means that elevated expenses will likely depress performance throughout the year, and likely into next year.”