AEM Beats Q1 Earnings and Revenue Estimates, Wall Street Bullish

Agnico Eagle Mines’ Q1 2019 results

Agnico Eagle Mines (AEM) released its Q1 2019 results yesterday and held the accompanying conference call today. Its earnings per share (EPS) were $0.16, down from $0.19 per share in Q1 2018. The EPS, however, beat analysts’ expectations of $0.09. Its revenues came in at $532.2 million, higher than analysts’ estimate of $515 million.

AEM Beats Q1 Earnings and Revenue Estimates, Wall Street Bullish

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Operating stats improved

The company’s gold (GLD) production improved by 2% year-over-year to 398,217 ounces. This total includes pre-commercial production of 17,582 ounces from the Meliadine project. AEM’s all-in sustaining costs (or AISC) improved by 6% year-over-year to $836 per ounce in Q1. Without the contribution from Meliadine, the company’s production would have declined compared to the year-ago period because throughput levels at its Meadowbank mine have reduced as it transitions to the Amaruq satellite deposit in the second half of 2019.

The Meliadine mine is expected to reach commercial production in May 2019. With the start-up of Meliadine and Amaruq in the third quarter, the company is expecting higher earnings and cash flows in the second half of the year. Analysts are estimating an increase of 7.3% and 15.6% year-over-year in AEM’s revenues for 2019 and 2020, respectively.

Analysts bullish on AEM

Agnico’s CEO, Sean Boyd, said, “Operationally, 2019 is off to a very good start with strong production and cost performance in the first quarter from Goldex, Kittila, Pinos Altos and Creston Mascota.”

In the senior and intermediate gold miner space (GDX)(GDXJ) analysts are most bullish on Agnico Eagle Mines (AEM), with ~78.0% recommending “buy” and 22.0% recommending “hold” ratings. Its project execution has changed analysts’ views on the stock. A year ago, only 50.0% of analysts were recommending “buy” for AEM. IAMGOLD (IAG), Newmont Mining (NEM), and Yamana Gold (AUY) follow AEM with 75%, 71%, and 67% of analysts recommending a “buy” on these stocks, respectively.