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Silver Wheaton reports lower Q4 earnings, but shares move up

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Silver Wheaton Corp. (TSE:SLW)(NYSE:SLW), the world’s largest precious-metals finance firm, was trading higher at midday Thursday, despite reporting 45 percent lower fourth quarter earnings.

Shares of Silver Wheaton rose 2.84 percent to C$19.55 at 12.30 pm in Toronto, which is closer to the 52-week low of C$16.57 set last November than the 52-week high of C$27.66 set in July 2014.

Shares of Silver Wheaton have been dropping sharply over the past three months, due to a combination of weak silver prices and share dilution, but started to rebound this week.

After market close on March 18, the Vancouver-based Silver Wheaton reported that net income decreased to $52 million, or $0.14 per share, in the September-to-December period, from $93.9 million, or $0.26 per share, a year earlier.

Revenue decreased 16 percent to $140.4 million in the fourth quarter from $167.4 million in the prior year period. 

These numbers were below analysts' estimates of $0.16 in earnings per share and $165.8 million revenue.

Average realized sale price per silver equiValent ounce sold in the fourth quarter of 2014 was $16.43, down 22 percent year over year.

Attributable silver equiValent production was 9.0 million oz., down 8 percent from 9.7 million ounces a year earlier. Sales volume rose 7 percent to 8.5 million ounces.

Silver Wheaton recently acquired a 25% stake (for US$900 million) in the gold stream produced by Vale SA at the Salobo copper mine in Brazil. It also diluted its stock by issuing US$800 million in new shares in a bought deal in order to pay for the asset.

Silver Wheaton is not a mining company, and as such, faces a different set of risks. In other words, the company can still turn a profit in a weak precious metals market because it is in the business of buying and selling metal streams, rather than producing gold and silver itself.

 

Quick facts: Wheaton Precious Metals

Price: 42.39 CAD

TSX:WPM
Market: TSX
Market Cap: $18.94 billion
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