First Majestic Silver (NYSE:AG) Posts Earnings Results, Hits Expectations

Key Points

• First Majestic Silver reported quarterly EPS of $0.19, in line with estimates, while revenue of $394.1 million topped the $390 million consensus.
• Q3 revenue rose 38% year over year and EBITDA climbed 78% to $228 million. Management cited about $1.3 billion in liquidity and ongoing investment in growth projects.
• A labor dispute at San Dimas led to 12 days of lost production and remained unresolved at the time of the call; the company also reduced its quarterly dividend from $0.0152 to $0.0142 per share.

First Majestic Silver (NYSE:AG - Get Free Report) TSE: FR released its earnings results on Thursday. The mining company reported $0.19 earnings per share (EPS) for the quarter, meeting analysts' consensus estimates of $0.19, reports. First Majestic Silver had a return on equity of 13.36% and a net margin of 21.18%. The company had revenue of $394.10 million during the quarter, compared to analyst estimates of $390.00 million.

Here are the key takeaways from First Majestic Silver's conference call:

• Q3 revenue rose 38% year over year to $394 million, while EBITDA increased 78% to $228 million. Silver production was 3.4 million ounces and gold production was 30,000 ounces; management said cash flows remained robust despite lower metal prices.
• First Majestic reported roughly $1.3 billion in liquidity, declared a record dividend and repurchased 1.3 million shares to date. The company is also making its largest-ever annual capital investment, according to management.
• Growth projects are advancing: Santa Elena’s plant expansion is progressing, Santo Niño development began earlier than expected, and Jerritt Canyon remains on track for its targeted restart milestones. Management said Jerritt’s hiring, underground development and equipment orders are progressing, though further guidance is forthcoming.
• A labor disruption at San Dimas caused 12 days of lost Q3 production and remained unresolved at the time of the call. The dispute centers on the company’s refusal to cover workers’ income taxes on bonuses.
• Management said progress is being made toward resolving the Mexican tax dispute and that the NAFTA arbitration was dropped, but any payments would follow a lengthy process and timing remains uncertain. AISC is also higher, partly because of lower cutoff grades and profit-linked employee payments; management said per-ton costs were stable and margins were expanding.

First Majestic Silver Trading Up 1.8%

AG stock traded up $0.27 during trading on Friday, hitting $15.16. The company had a trading volume of 11,628,804 shares, compared to its average volume of 9,689,074. The firm has a 50-day moving average price of $17.63 and a 200-day moving average price of $19.86. First Majestic Silver has a 12 month low of $10.72 and a 12 month high of $32.03. The company has a quick ratio of 2.38, a current ratio of 2.57 and a debt-to-equity ratio of 0.08. The stock has a market cap of $7.48 billion, a price-to-earnings ratio of 16.09 and a beta of 0.98.

First Majestic Silver Cuts Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Monday, November 30th. Investors of record on Monday, November 16th will be given a $0.0142 dividend. This is a drop from First Majestic Silver's previous quarterly dividend of $0.0152. The ex-dividend date is Monday, November 16th. This represents a $0.06 annualized dividend and a yield of 0.4%. First Majestic Silver's dividend payout ratio is presently 8.45%.

Wall Street Analysts Forecast Growth

Several analysts recently issued reports on the stock. HC Wainwright decreased their price objective on shares of First Majestic Silver from $25.50 to $25.00 and set a "buy" rating for the company in a report on Friday. Wall Street Zen cut shares of First Majestic Silver from a "buy" rating to a "hold" rating in a research note on Saturday, July 25th. Zacks Research lowered First Majestic Silver from a "hold" rating to a "strong sell" rating in a research note on Monday, October 19th. Weiss Ratings reiterated a "hold (c)" rating on shares of First Majestic Silver in a research note on Wednesday, September 2nd. Finally, ATB Cormark Capital Markets raised First Majestic Silver from a "hold" rating to a "moderate buy" rating in a research note on Friday, July 10th. Three equities research analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat, First Majestic Silver currently has a consensus rating of "Hold" and an average price target of $23.75.

First Majestic Silver Company Profile

First Majestic Silver Corp. is a mining company focused on the exploration, development, and production of silver and gold. The company operates producing mines in Mexico and the United States and sells silver bullion and related products through its in-house First Mint division.

First Majestic's Mexican operations include the San Dimas Silver/Gold Mine in Durango, the Santa Elena Silver/Gold Mine in Sonora, and the La Encantada Silver Mine in Coahuila. The company also owns the Jerritt Canyon Gold Mine in Nevada, although operations there have been suspended while First Majestic evaluates its future.

Founded in 2002 and headquartered in Vancouver, British Columbia, First Majestic has historically concentrated its growth strategy on acquiring and developing precious-metals assets in the Americas.

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