Is Silver Wheaton Able to Turn it around?

Shares of Silver Wheaton Corp. (SLW) have slightly declined during November: The stock slipped by 1.8% since the beginning of the month (up-to-date). The ongoing drop in silver price is pressuring down the company’s stock. Other silver and gold investments including iShares Silver Trust (SLV), SPDR Gold Trust (GLD) and GoldCorp (GG) have also decreased during the month. Will Silver Wheaton rally from its recent fall? Let’s examine the latest developments related to Silver Wheaton including its third quarter earnings report.

Third quarter results

The company’s recent third quarter earnings report came out earlier this week and didn’t meet investors and analysts’ expectations: Its revenues remained nearly flat compared to the second quarter of 2013 and slightly rose by 3.1% compared to the third quarter in 2012.

The adverse effect of the prices of gold and silver didn’t come as a surprise. The main issue was the lower than expected gold sales in ounces. The table bellow shows the company’s gold revenues, ounces sold and prices of gold in the past several quarters.

The sharp drop in the price of gold has slightly offset the rise in gold sales (in ounces). The company’s gold sales rose on account of higher production in its Sudbury and Salobo mines that Silver Wheaton had acquired earlier this year. Despite the rise in gold sales, it didn’t meet the expectations mainly due to the sharp drop in gold sales from the 777 mine by 28% (quarter-over-quarter).

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Disclaimer: The author holds no positions in stocks mentioned and does not plan to initiate positions within 120 hours of the posting of this article. This article is to be used for educational, research and informational purposes only and does not constitute investment advice. There are no guarantees, expressed or implied, of future positive returns in regards to the subject matter contained herein. Understand the risks inherent in investing before making the decision to invest or consult an investment professional for more information. Reasonable due diligence has been performed in regards to the information in this article. However, the author expressly disclaims any liability for accidental omissions of information or errors in fact.