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Hecla Mining (HL) Q3 Earnings Beat Estimates, Revenues Up Y/Y

Hecla Mining Company HL reported a third-quarter 2023 adjusted loss per share of one cent, faring better than the Zacks Consensus Estimate of a loss of two cents per share. HL had reported a loss of one cent per share in the third quarter of 2022.

Including one-time items, the company reported a loss of four cents per share, flat with the prior-year quarter.

The company’s revenues increased 25% year over year to around $182 million in the quarter under review. The figure beat the Zacks Consensus Estimate of $175 million. Around 38% of the revenues pertained to silver and 36% from gold. Higher realized prices for gold, silver, lead and zinc mainly led to the year-over-year improvement. While silver ounces sold increased 27% year over year, gold ounces sold were down 9% from the year-ago quarter.

Hecla Mining Company Price, Consensus and EPS Surprise

 

Hecla Mining Company Price, Consensus and EPS Surprise
Hecla Mining Company Price, Consensus and EPS Surprise

Hecla Mining Company price-consensus-eps-surprise-chart | Hecla Mining Company Quote

The total cost of sales increased 8% year over year to $148 million in the quarter. Gross profit soared 296% to $33.5 million. The gross margin in the third quarter of 2023 was 18.4% compared with 5.8% in the year-ago quarter.

The company reported exploration and pre-development expenses of $13.7 million in the quarter. This brings the total for the current year to $25.5 million. Exploration activities during the quarter were mainly focused on surface and underground exploration drilling at Greens Creek, Keno Hill, Casa Berardi and Aurora.

Adjusted EBITDA was around $46.3 million, up 74% from $26.6 million in the third quarter of 2022.

Hecla Mining reported cash costs per silver ounce and all-in sustaining costs per silver ounce of $3.31 (down 3.5% year over year) and $11.39 (down 12%), respectively, in the third quarter of 2023.

Production Numbers & Some Mine Updates

Hecla Mining reported silver production of 3.5 million ounces in the third quarter of 2023, flat compared with the third quarter of 2022. In the first nine-month period of 2023, the company’s total silver output was 11.4 million ounces. Gold production was 39,269 ounces in the quarter under review compared with 44,747 ounces in the year-ago quarter.

The Lucky Friday mine produced 0.5 million ounces of silver during the quarter before production was suspended in August due to a fire incident. HL stated that the mine is on track to resume operations at the beginning of 2024. Casa Berardi has started the transition to an open pit-only operation, producing 24,259 ounces of gold in the quarter. Ramp-up at Keno Hill continues, with the mine producing 0.7 million ounces of silver in the third quarter.

Financial Position

Hecla Mining ended the third quarter of 2023 with $100.7 million of cash in hand, down from $104.7 million held at the end of 2022. Cash flow from operating activities was $10.2 million in quarter against an outflow of $24.3 million in the third quarter of 2022.

Production Guidance for 2023

The company expects gold production to be 140,000-160,000 ounces. Hecla Mining’s silver production guidance is at 14.4-14.8 million ounces for 2023, lower than the earlier-stated range of 14.5-15.5 million ounces. Silver production for Greens Creek has increased to reflect the higher silver production so far this year at the mine. The expectation for silver production at Keno Hill has been lowered to incorporate the delays to mine infrastructure and initiatives to improve mine safety.

Consolidated silver production guidance is now projected at 36.0 - 38.5 million ounces, down from the earlier stated 36.5-39 million ounces, reflecting the suspension of operations at the Lucky Friday mine for the remainder of the year.

HL maintains its target to achieve 20 million ounces of silver production in 2025.

Price Performance

Shares of Hecla Mining have declined 17.7% in the past year compared with the industry's 5% fall.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

Zacks Rank & Stocks to Consider

Hecla Mining currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation CRS, The Andersons Inc. ANDE and WestRock Company WRK. CRS currently sports a Zacks Rank #1 (Strong Buy), and ANDE and WRK carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Carpenter Technology has an average trailing four-quarter earnings surprise of 14.3%. The Zacks Consensus Estimate for CRS’ fiscal 2024 earnings is pegged at $3.57 per share. The consensus estimate for 2024 earnings has moved 3% north in the past 60 days. Its shares have gained 69% in a year’s time.

The consensus estimate for ANDE's current-year earnings has been revised 3.3% upward over the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. ANDE shares have rallied around 38% in a year.

In the past 60 days, the Zacks Consensus Estimate for WestRock’s current fiscal year has been revised upward by 5.2%. WRK beat the consensus estimate in three of the last four quarters while missing in one quarter, the average earnings surprise being 30.7%. The company’s shares have gained 6% in the past year.

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