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Hecla Mining (HL) Q4 Earnings Beat Estimates, Revenues Miss

Hecla Mining Company HL reported a fourth-quarter 2022 adjusted earnings per share of 2 cents, beating the Zacks Consensus Estimate of break-even earnings. The reported figure was down from 2021’s earnings per share of 6 cents.

Including one-time items, the company reported a loss of 1 cent per share against earnings per share of 2 cents in the prior-year quarter.

The company’s revenues increased 5.4% year over year to $195 million in the quarter under review. The top-line figure, however, missed the Zacks Consensus Estimate of $196 million.

Gold prices were 2.5% down year over year to $1,757 an ounce. The realized silver price was $22.03 per ounce in the quarter, down 6.2% from $23.49 in the last year’s quarter. Realized prices for lead and zinc were lower by 7% and 24%, respectively.

The total cost of sales increased 28.8% year over year to $170 million in the quarter. Gross profit declined 52.8% to $25 million. The gross margin in the fourth quarter of 2022 was 12.8%, compared with 28.6% in the prior year quarter.

The company reported a decrease of $8.2 million in exploration and pre-development expenses, owing to the completion of seasonal exploration programs in the previous quarter. Adjusted EBITDA was $62 million, up from $58 million in the fourth quarter of 2021.

Hecla Mining reported cash costs per silver-equivalent ounce and all-in sustaining costs (AISC) per silver ounce of $14.36 in the quarter, marking a year-over-year increase of 42%.

Hecla Mining Company Price, Consensus and EPS Surprise

 

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

Production Numbers

Hecla Mining reported silver production of 3.66 million ounces in the fourth quarter of 2022, up 3.1% on a sequential basis. Compared with the fourth quarter of 2021, production was up 13.3%.

Gold production was down 2.5% to 43,634 ounces compared with the third quarter of 2022. Compared with the prior-year quarter, gold production was down 9.1%.

Financial Position

Hecla Mining ended 2022 with $106 million of cash in hand, down from the $211 million held at the end of 2021. Cash flow from operating activities was $36 million in the fourth quarter of 2022 compared with an inflow of $53 million in the prior-year period.

2022 Performance

The company delivered adjusted earnings per share of 5 cents in 2022, marking a 25% increase from the 2021 level. The reported figure surpassed the Zacks Consensus Estimate of a loss of 1 cent per share.

Including one-time items, the company reported a loss of 7 cents per share against earnings per share of 6 cents recorded in the prior year.

The company’s revenues fell 10.9% year over year to $719 million in 2022. The top-line figure missed the Zacks Consensus Estimate of $724 million.

Hecla Mining announced that in 2022, it delivered the highest silver reserves in its 130-year history. In 2022, the company replaced 14 million ounces of silver produced, and increased proven and probable reserves by 21% from the 2021 level. The increase was driven by the acquisition of Keno Hill in Canada's Yukon Territory.

Gold production of more than 180,000 ounces was not replaced, and proven and probable reserves fell 6% to 2.6 million ounces due to higher costs.

Guidance

HL expects consolidated silver production to rise over the next three years, reaching 18.5-20 million ounces by 2025. Consolidated gold production is anticipated to fall to 160-170 thousand ounces in 2023.

Price Performance

Shares of Hecla Mining have gained 1.4% in the past year against the industry's fall of 23.7%.

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Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the basic materials space are CalMaine Foods, Inc. CALM, Reliance Steel & Aluminum Co. RS and Teck Resources Limited TECK. CALM and RS currently flaunt a Zacks Rank #1 (Strong Buy), and TECK carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for CalMaine Foods’ fiscal 2023 earnings per share is pegged at $16.75, suggesting 515.8% growth from the year-ago reported figure. Earnings estimates have moved 106.8% north in the past 60 days. CALM has a trailing four-quarter earnings surprise of 15.3%, on average. Its shares have gained 43.6% in the past year.

The Zacks Consensus Estimate for Reliance Steel’s earnings per share is pegged at $18.26 for 2023. Earnings estimates have been revised 7.4% upward in the past 60 days. RS has a trailing four-quarter average surprise of 13.4%, on average. The company has gained 41.7% in a year.

The Zacks Consensus Estimate for Teck Resources’ 2022 earnings per share is pegged at $6.89, suggesting 52.43% growth from the year-ago reported figure. Earnings estimates have moved 0.7% north in the past 60 days. TECK has a trailing four-quarter earnings surprise of 3.7%, on average. Its shares have gained 24.4% in the past year.

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