Agnico (AEM) Up 7.9% Since Last Earnings Report: Can It Continue?

Core Insights - Agnico Eagle Mines reported strong Q2 2024 earnings, with adjusted earnings of $1.07 per share, significantly up from 65 cents in the same quarter last year, and exceeding the Zacks Consensus Estimate of 93 cents [2] - The company generated revenues of $2,076.6 million, marking a nearly 21% year-over-year increase and surpassing the Zacks Consensus Estimate of $1,719 million [2] Operational Highlights - Payable gold production reached 895,838 ounces, an increase from 873,204 ounces year-over-year, exceeding the estimate of 843,693 ounces [3] - Total cash costs per ounce for gold were $870, up from $840 a year ago, but lower than the estimate of $878 [3] - Realized gold prices were $2,342 per ounce, up from $1,975 year-over-year, and above the estimate of $2,021 [3] - All-in-sustaining costs (AISC) were $1,169 per ounce, compared to $1,150 per ounce a year ago, and lower than the estimate of $1,193 [3] Financial Position - The company ended the quarter with cash and cash equivalents of $922 million, a 113% increase year-over-year [4] - Long-term debt decreased to approximately $1,101.7 million, down 46.7% year-over-year [4] - Total cash from operating activities was $961.3 million in Q2, up from $722 million a year ago [4] Outlook - For 2024, Agnico anticipates gold production between 3.35-3.55 million ounces, with total cash costs projected between $875-$925 per ounce and AISC between $1,200 and $1,250 [5] - Capital expenditures for 2024, excluding capitalized exploration, are projected to be between $1.6 billion and $1.7 billion [5] Estimate Trends - Recent estimates for Agnico have trended upward, with a consensus estimate shift of 12.03% [6] - The stock currently holds a Zacks Rank 3 (Hold), indicating an expected in-line return in the coming months [8] Industry Performance - Agnico Eagle operates within the Zacks Mining - Gold industry, where competitor Newmont Corporation reported revenues of $4.4 billion, a year-over-year increase of 64.1% [9] - Newmont's EPS for the same period was $0.72, compared to $0.33 a year ago, with a projected earnings change of 97.2% for the current quarter [9]