Pan American Silver Earnings: Here’s Why the Stock is Down Now

Pan American Silver Corp. (NASDAQ:PAAS) had a loss and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 1.13%.

Pan American Silver Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased to $-0.07 in the quarter versus EPS of $0.11 in the year-earlier quarter.

Revenue: Decreased 12.46% to $175.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Pan American Silver Corp. reported adjusted EPS loss of $0.07 per share. By that measure, the company missed the mean analyst estimate of $0.05. It missed the average revenue estimate of $200.73 million.

Quoting Management: Geoff Burns, President & CEO, commented on the second quarter 2013 results, “The second quarter was a challenging time for Pan American. A somewhat weaker than expected production quarter coupled with the precipitous fall in silver and gold prices severely squeezed our operating margins, forced us to recognize negative pricing adjustments and inventory write-downs, and to book an impairment on the long-term net realizable value of the Dolores mine, which we acquired last year.” Burns continued, “But we have responded. We have retuned and refocused our mining operations, cut our exploration programs and reduced our overheads in order to weather the current price downturn and maintain our financial strength. I am confident that even if prices remain at current levels, we will see a vastly improved second half of the year, with higher production, lower costs and increased cash flow from our operations. Pan American remains in solid financial health with excellent liquidity and only minor debt levels, and the steps we have taken over the last three months will make us a more productive and robust company.”

Key Stats (on next page)…

Revenue decreased 27.74% from $243.01 million in the previous quarter. EPS decreased to $-0.07 in the quarter versus EPS of $0.26 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.24 to a profit $0.03. For the current year, the average estimate has moved down from a profit of $0.93 to a profit of $0.4 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)