Fortuna Silver Mines Inc. FSM reported second-quarter 2022 adjusted earnings per share of 1 cent per share, which missed the Zacks Consensus Estimate of 7 cents. The bottom line marked an 86% slump from the year-ago quarter’s level. Results were impacted by lower sales at San Jose due to the declining silver prices and corresponding negative concentrate sales adjustments, and lower production. Higher G&A expenses also hurt earnings.
Including one-time items, Fortuna Silver reported earnings of 1 cent per share in the quarter under review compared with 9 cents in the year-ago quarter.
Fortuna Silver’s revenues improved 39% year over year to $167.5 million in the quarter under review. Consolidated realized prices were $1,870 per ounce and $22.62 per ounce for gold and silver respectively in the quarter.
All-In Sustaining Cost (AISC) per ounce of gold sold was $1,151 for the Lindero Mine and $1,565 for the Yaramoko Mine. AISC per silver equivalent ounce of payable silver sold came in at $15.41 and $18.19 for the San Jose Mine and Caylloma Mine, respectively.
Fortuna Silver Mines Inc. Price, Consensus and EPS Surprise
Fortuna Silver Mines Inc. price-consensus-eps-surprise-chart | Fortuna Silver Mines Inc. Quote
FSM reported a mine-operating profit of $32.5 million in the quarter under review, reflecting a year-over-year decline of 33%. Operating profit was $13.1 million, down 64% from $35.9 million in the prior-year quarter.
Adjusted EBITDA improved 5.5% year over year to $57.9 million in the second quarter of 2022. The adjusted EBITDA margin was 34.6% compared with 45.6% in the prior-year quarter.
Fortuna Silver ended the second quarter of 2022 with around $116 million of cash and cash equivalents compared with $107 million held at the end of last year’s comparable quarter. Total liquidity as of Jun 30, 2022, was $136.1 million. Net cash flow from operating activities was $47.4 million in the quarter compared with $29.5 million in the prior-year quarter.
In the quarter under review, silver and gold production was recorded at 1,652,895 ounces and 62,171 ounces, respectively. Compared to last year’s production figures, gold production improved 100%, while silver output declined 13%. Gold equivalent production in the quarter stood at 96,7123 ounces.
Per management, Séguéla construction is 66% complete as of the end of June. It is on track for the first gold pour in mid-2023.
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Shares of Fortuna Silver have fallen 37.6% in a year compared with the industry’s decline of 25.7%.
Zacks Rank & Stocks to Consider
Fortuna Silver currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the basic materials space are ATI Inc. ATI, Albemarle Corporation ALB and Ashland Global Holdings Inc. ASH.
ATI, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 1,069.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 12.5% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
ATI’s earnings beat the Zacks Consensus Estimate in the last four quarters. It has a trailing four-quarter earnings surprise of 128.9%, on average. ATI shares have surged 56% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle has a projected earnings growth rate of 247% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 7.8% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 20%. ALB has gained roughly 12% in a year and has a Zacks Rank of 1 at present.
Ashland, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 50.9% for fiscal 2022. The Zacks Consensus Estimate for ASH’s fiscal 2022 earnings has been revised 10.5% upward in the past 60 days.
ASH’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the same once. Ashland has a trailing four-quarter earnings surprise of 1.82%, on average. Its shares have been up around 23% in a year.
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