Key Takeaways From Wheaton Precious Metals’ Second Quarter Results

by Trefis Team
Wheaton Precious Metals
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Wheaton Precious Metals (NYSE: WPM) released its second-quarter results on 14th August and conducted a conference call with analysts the following day. The company posted better than expected results, beating both earnings and revenue estimates, largely benefiting from a higher proportionate share of gold output. The company reported an EPS (Non-GAAP) of $0.16, almost 9% higher on a year-on-year (y-o-y) basis and a revenue of $212.4 million, 6% higher y-o-y.

Wheaton reported a 21.1% y-o-y increase in its gold sales volume for the quarter and a 6.2% decline in its silver sales volume during the second quarter. The increase and the decrease in the respective volumes broadly reflect the recent changes in the company’s San Dimas streaming agreement. Wheaton Precious Metals in January announced the restructuring of its streaming agreement at San Dimas mines wherein it terminated its existing San Dimas purchase agreement and entered into a new purchase agreement with First Majestic with respect to San Dimas. The terms of the new agreement reduces the company’s silver output share from San Dimas and increases its access to the mine’s gold output.

This new agreement has remained beneficial for the company as a greater exposure to gold has enabled it to benefit from the prevalent higher gold prices. The company reported a 3.3% y-o-y increase in its realized gold prices for the quarter. Global trade war tensions stirred the demand for safe-haven assets during the quarter; however, a stronger dollar impeded the growth of gold prices. Unanticipated trade war concerns could potentially drive gold prices higher in the second half of the year and hence remain beneficial for Wheaton in the upcoming quarters.

Our key expectations for the company’s 2018 results have been kept unchanged and are highlighted in our interactive dashboard: What To Expect From Wheaton Precious Metals In 2018? You can make changes to our assumptions by using our interactive platform to arrive at your own fair price estimate for the company.


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