Silver Wheaton Corp. (SLW, Financial) closed the third quarter of 2016 reporting net earnings of 19 cents per share, an increase of seven cents, or 58.34%, from the same quarter of 2015.
Silver Wheaton missed analysts’ expectations on earnings per share by two cents and generated a negative surprise of 9.5%. On average, analysts expected EPS to be 21 cents, as shown in the chart below.
Source: Yahoo Finance
Revenue of $233 million increased as well during the third quarter, up 52% on a year over year basis. However, Silver Wheaton missed analysts’ expectations on revenue by $28.61 million. In the same quarter of the prior year, the silver streamer reported revenue of $153.25 million. Analysts estimated a revenue of $261.61 million, a 70.7% increase from the prior year.
Source: Yahoo Finance
Compared to the third quarter of 2015, the silver streamer reported higher earnings and revenue due to price increases for precious metals.
The price of silver was $19.53 per ounce on average, a 30% increase on a year over year basis. The same applies to gold. In the third quarter of 2016, the company was able to make $1,336 per ounce of gold sold, an 18% increase on a year over year basis.
Cash flow from operations increased as well. When comparing the third quarter of 2016 to the same quarter of 2015, cash flow from operating activities increased to $161.58 million, or 37 cents per share, from $99.55 million, or 25 cents per share. Besides a higher realized price from the sale of the precious metals, the higher cash flow from operations is attributed to selling more gold in the third quarter of 2016 than in the same quarter a year ago.
The $6 million interest the streamer paid on the debt of $1.345 billion did not have much influence on the cash flow from operating activities produced by the company during the quarter.
The company increased its quarterly dividend by 20%Ă‚ from the same quarter a year ago and declared a dividend of six cents per share. The dividend yield is 0.83% at the current share price.
Yesterday, the stock closed at $24.08, up 52 cents per share ( 2.21%) from the previous trading day. Silver Wheaton has gained 93% year to date and the average target price is $33.75. Analysts recommend to buy the stock.
The company did not provide an update on its tax dispute with the Canadian Revenue Agency.Ă‚
The EV/EBITDA is 22.91 and the price-book (mrq) is 2.19.
Disclosure: I have no positions in Silver Wheaton Corp.
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