Agnico Eagle Mines Ltd. (AEM) on Thursday reported first-quarter earnings of $347.2 million.
On a per-share basis, the Toronto-based company said it had profit of 70 cents. Earnings, adjusted for non-recurring costs, came to 76 cents per share.
The results beat Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of 60 cents per share.
The gold mining company posted revenue of $1.83 billion in the period.
Agnico shares have climbed 18% since the beginning of the year. In the final minutes of trading on Thursday, shares hit $64.94, a rise of 15% in the last 12 months.
_____
This story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on AEM at https://www.zacks.com/ap/AEM
The completion of the Trans Mountain pipeline expansion is leading to a boom in demand for drilling services, said Precision Drilling PD-T +1.18%increase chief executive Kevin Neveu.
The contract driller is seeing demand exceed its expectations, he said on an earnings call Thursday, as the expansion of the crude oil pipeline to the West Coast approaches a May 1 start of commercial operations.
“Do we see customer interest increasing in anticipation of the Trans Mountain start up? The answer is resoundingly yes.”
The company has 48 rigs currently operating where last year it had 38, and expects demand to continue. It also expects a boost to well servicing contracts.
“We see this momentum continuing throughout the summer and exceeding our prior view on Canadian rig demand,” said Neveu.
The growth is helping offset a retreat in the U.S., where activity is more muted by weak natural gas prices and operator consolidation, he said.
The company reported 38 active drilling rigs in the U.S. for its first quarter compared with 60 for the first quarter of 2023.
In Canada, Precision averaged 73 active drilling rigs for the quarter, compared with 69 a year earlier.
The decline in U.S. activity helped lead its first-quarter profit to come in at $36.5 million, down from $95.8 million a year ago.
The company says the profit amounted to $2.53 per diluted share for the quarter ended March 31, down from $5.57 per diluted share the same time last year.
Revenue totalled $527.8 million, down from $558.6 million in the first quarter of 2023.
The company is focused on cost reductions, paying down debt and returning profits to shareholders, said Neveu.
Precision is also investing in automated rig technology that could mean future rises in demand won’t lead as much to booms in employment.
The system has several more months ahead of field hardening before it’s commercially ready, but so far it’s working better than expected, said Neveu.
“We’ll eliminate human work from the red zone on the drill rig floor and in the mast, while ensuring our customers safe, consistent, predictable and highly efficient rig floor performance.”
Rogers Communications Inc. RCI-B-T -0.57%decrease reported lower first-quarter profit and higher revenue as it works to pay down debt from its $20-billion takeover of Shaw Communications Inc.
The wireless giant had $256-million of net profit during the three-month period ended March 31, down 50 per cent from a year ago when it reported $511-million of profit.
Meanwhile, the company’s revenue increased 28 per cent year-over-year to $4.90-billion, up from $3.84-billion.
Rogers’s acquisition of Shaw, which closed on April 3 of last year, boosted revenue, while also resulting in higher financing costs and higher depreciation and amortization on assets acquired as part of the deal.
Rogers chief executive officer Tony Staffieri said the Toronto-based telecom has delivered on its goal of finding $1-billion of savings stemming from the deal a year ahead of schedule, and it is now focused on reducing its debt leverage ratio by selling off non-core assets.
Glenn Brandt, the company’s chief financial officer, said that process is taking longer than he had expected because the real estate market has been soft ahead of anticipated interest-rate cuts.
“We do anticipate completing sales in 2024,” Mr. Brandt said during a conference call to discuss the telecom’s results, later adding, “We are being diligent to ensure we maximize proceeds.”
Canadian telecom stocks have been under pressure lately owing to a combination of factors, including elevated interest rates, heightened competition and limited avenues for growth.
Shares of Rogers fell by 3.5 per cent to $52.21 on the Toronto Stock Exchange in Wednesday afternoon trading.
The telecom added 98,000 net new postpaid mobile-phone customers during the quarter, up from 95,000 during the same quarter last year. (Postpaid subscribers are those who are billed at the end of the month for the services they used, while prepaid customers pay upfront for wireless services.)
It lost, on a net basis, 37,000 prepaid customers, compared with a net loss of 8,000 during the first three months of 2023.
Ottawa recently announced plans to slash the number of temporary residents, and some analysts see that as a headwind for the sector, which has benefited from immigration in recent years.
Monthly ARPU – average revenue per user – was $58.06, up 80 cents year-over-year from $57.26.
Desjardins analyst Jérome Dubreuil characterized the ARPU growth as “impressive in the context of strong competition, and shows RCI’s commitment to its premium-brand-first strategy.”
“This might not be the case for peers as they have not fully followed this strategy,” he wrote in a research note.
Churn – the rate of customer turnover on a monthly basis – in its postpaid customer base rose to 1.10 per cent, up from 0.79 per cent during the same period last year.
BCE Inc. is scheduled to report next week, with Telus Communications Inc. slated for May 9.
The Labor Department released a report on Thursday showing an unexpected decrease by first-time claims for U.S. unemployment benefits in the week ended April 20th.
The report said initial jobless claims fell to 207,000, a decrease of 5,000 from the previous week’s unrevised level of 212,000. The dip surprised economists, who had expected jobless claims to inch up to 214,000.
With the unexpected decline, jobless claims dropped to their lowest level since hitting 200,000 in the week ended February 17th.
The Labor Department said the less volatile four-week moving average also edged down to 213,250, a decrease of 1,250 from the previous week’s unrevised average of 214,500.
Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also slid by 15,000 to 1.781 million in the week ended April 13th.
The four-week moving average of continuing claims also fell to 1,794,000, a decrease of 7,250 from the previous week’s revised average of 1,801,250.
Next Friday, the Labor Department is scheduled to release its more closely watched report on employment in the month of April.
Pending home sales in the U.S. surged by much more than expected in the month of March, according to a report released by the National Association of Realtors on Thursday.
NAR said its pending home sales index spiked by 3.4 percent to 78.2 in March after jumping by 1.6 percent to 75.6 in February. Economists had expected pending home sales to rise by just 0.3 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
“March’s Pending Home Sales Index – at 78.2 – marks the best performance in a year, but it still remains in a fairly narrow range over the last 12 months without a measurable breakout,” said NAR Chief Economist Lawrence Yun. “Meaningful gains will only occur with declining mortgage rates and rising inventory.”
Pending home sales in the South and West led the sharp monthly increase, soaring by 7.0 percent and 6.8 percent, respectively.
The report said pending home sales in the Northeast also jumped by 2.7 percent, while pending home sales in the Midwest plunged by 4.3 percent.
NAR also revealed it expects existing sales to surge by 9.0 percent to 4.46 million in 2024 and skyrocket by another 13.2 percent to 5.05 million in 2025.
“Home sales have lingered at 30-year lows, and since 70 million more Americans live in the country now compared to three decades ago, it’s inevitable that sales will rise in coming years,” explained Yun.
A separate report released by the Commerce Department on Tuesday showed a substantial rebound in new home sales in the U.S. in the month of March.
The Commerce Department said new home sales spiked by 8.8 percent to an annual rate of 693,000 in March after plunging by 5.1 percent to a revised rate of 637,000 in February.
Economists had expected new home sales to rise to an annual rate of 668,000 from the 662,000 originally reported for the previous month.
A report released by the Commerce Department on Thursday showed the U.S. economy grew by much less than expected in the first quarter of 2024.
The Commerce Department said gross domestic product increased by 1.6 percent in the first quarter after surging by 3.4 percent in the fourth quarter of 2023. Economists had expected GDP to jump by 2.5 percent.
The GDP growth in the first quarter reflected increases in consumer spending, residential fixed investment, nonresidential fixed investment, and state and local government spending.
However, the positive contributions were partly offset by a decrease in private inventory investment and an increase in imports, which are a subtraction in the calculation of GDP.
The Commerce Department said the notable slowdown in GDP growth compared to the previous quarter primarily reflected decelerations in consumer spending, exports, and state and local government spending and a downturn in federal government spending.
The report showed consumer spending growth slowed to 2.5 percent in the first quarter from 3.3 percent in the fourth quarter, with an increase in spending services partly offset by a decrease in spending on goods.
“The economy will likely decelerate further in the following quarters as consumers are likely near the end of their spending splurge,” said Jeffrey Roach, Chief Economist for LPL Financial. “Savings rates are falling as sticky inflation puts greater pressure on the consumer.”
On the inflation front, the Commerce Department said the personal consumption expenditures price index surged 3.4 percent in the first quarter after advancing by 1.8 percent in the fourth quarter.
Excluding food and energy prices, the PCE price index spiked 3.7 percent in the first quarter after jumping by 2.0 percent in the fourth quarter.
“We should expect inflation will ease throughout this year as aggregate demand slows, although the path to the Fed’s 2% target still looks a long ways off,” said Roach.
Gold could rally to $3,000, according to David Rosenberg, the founder and president of Rosenberg Research, as noted by MarketWatch.com. In addition, according to Citi analysts, gold could reach that level in the next six to 18 months thanks to investor inflows and hopes the Federal Reserve will cut interest rates. That’s in addition to safe-haven demand and growing interest in gold from global central banks. All of which is positive news for gold companies, such as U.S. Gold Corp. (NASDAQ:USAU), Barrick Gold Corporation (NYSE:GOLD) (TSX:ABX.TO), Royal Gold Inc. (NASDAQ:RGLD), Franco Nevada Corp. (NYSE:FNV) (TSX:FNV.TO), and Newmont Corp. (NYSE:NEM) (TSX:NGT.TO).
As noted on Yahoo Finance, “In March, China’s central bank added another 160,000 troy ounces to its reserves, marking its seventeenth consecutive month. As the Chinese yuan experiences a decline in its status as the world’s second most significant reserve currency, and countries such as Japan, Russia, Turkey, and Poland express concerns about overdependence on the US dollar, a notable shift towards gold has emerged. Looking ahead, analysts remain optimistic about gold’s outlook, with some predicting prices could climb even higher.”
Based on the success of Kibali, which Barrick Gold has built into Africa’s largest gold mine, the company is ready to invest in new gold and copper opportunities in partnership with the government of the DRC, says president and chief executive Mark Bristow. Speaking to media at a site visit to the mine, Bristow said Kibali was on track for another value-creating year on the back of a strong production performance. It was also well set to replace the ounces that were being depleted by mining with more of the same high quality. “Kibali has transformed what was previously the disadvantaged north-east region of the country into a new economic frontier and a flourishing commercial hub. Of our $5 billion investment in the DRC, more than half has been spent with local contractors and suppliers, many of whose growth into substantial businesses we have promoted by enhancing their commercial and technical skills and providing them with the opportunities to exercise these. Kibali’s third hydropower station, for example, was built by an all-Congolese team,” he said.
Royal Gold announced that management will host an Investor Update to provide an update on Royal Gold’s business, including 2024 guidance, on Wednesday, April 17, 2024 from 10:00 a.m. to noon EDT (8:00 a.m. to 10:00 a.m. MDT). A press release detailing 2024 guidance will be issued, before market open, on the same day. Prepared remarks by members of Royal Gold’s management team will be followed by a live question and answer session.
Franco Nevada recently noted that, “In late 2023, we were challenged by the unprecedented production halt at Cobre Panama. We are hopeful that the issues can be resolved, although we have taken a prudent approach for the carrying value of the asset”, stated Paul Brink, CEO. “Despite the issue at Cobre Panama, our business remains robust and we continue to benefit from a long-duration, diversified portfolio. We finished the year with no debt and $1.4 billion in cash and cash equivalents. The balance of our business performed well in 2023 and is expected to grow in 2024 with contributions from the completion of the Tocantinzinho, Greenstone and Salares Norte gold mines. Our growth outlook through 2028 is driven by numerous new mines and mine expansions. $2.4 billion of available capital positions us well for attractive acquisitions in an environment where many project developers are capital constrained.”
Newmont Corp. reported higher gold Mineral Reserves of 135.9 million attributable ounces for 2023 compared to the Company’s 96.1 million ounces at the end of 2022. Newmont has significant upside to other metals, including more than 30 billion pounds of copper reserves and nearly 600 million ounces of silver reserves. “Newmont has strengthened its position as the responsible gold leader with the industry’s highest concentration of quality operations, reserves and resources,” said Tom Palmer, Newmont’s President and Chief Executive Officer. “In 2023, we added more than 47 million ounces of gold reserves and 14 billion pounds of copper reserves through the acquisition of Newcrest and the continuation of our industry-leading exploration program. With the largest gold and copper reserve base in the industry, Newmont is well-positioned to deliver stable production and meaningful value to stakeholders today and in the future.”
Teck Resources Ltd. reported its first-quarter profit fell compared with a year ago due in part to its reduced ownership in its steelmaking coal business as well as lower copper and zinc prices and higher costs.
The Vancouver-based mining company says it earned a profit attributable to shareholders of $343 million or 65 cents per diluted share for the quarter ended March 31. The result compared with a profit of $1.14 billion or $2.18 per diluted share in the same quarter last year.
Revenue totalled $3.99 billion, up from $3.79 billion in the first quarter of 2023.
On an adjusted basis, Teck says it earned 75 cents per diluted share from continuing operations, down from $1.78 per diluted share a year earlier.
Teck closed the sale of a minority stake in its steelmaking coal business, Elk Valley Resources, to Japan’s Nippon Steel Corp. and South Korean steelmaker Posco in January.
The deals are part of a broader plan that will see Glencore acquire the remaining 77 per cent stake in Elk Valley Resources. The Glencore transaction remains subject to regulatory review and is expected to close later this year.
This report by The Canadian Press was first published April 25, 2024.
Canada’s economic output on a per capita basis has slipped to 7 per cent below its long-term trend, amounting to a decline of roughly $4,200 a person, according to a report published Wednesday by Statistics Canada.
To return to trend over the next decade, real gross domestic product per capita would need to grow at an average annual rate of 1.7 per cent – similar to the robust expansion in the United States in recent years. The trend for per capita output is based on figures from 1981 through 2023, then extrapolated to 2033.
“Per capita growth of this magnitude is ambitious and a marked departure from recent trends,” wrote Carter McCormack and Weimin Wang, the authors of the report.
Canada’s moribund economic performance on a per person basis has become a flashpoint of discussion over the past couple of years. In a speech last month, Bank of Canada senior deputy governor Carolyn Rogers said the country is facing an “emergency” of weak labour productivity and tepid levels of business investment.
The recent numbers paint a grim picture. Real GDP per capita has fallen to levels seen in 2017. Workers in places with higher per capita output tend to earn higher wages and live longer, making this a popular – if imperfect – measure of a country’s living standards.
The Canadian economy was walloped by COVID-19 in 2020, and more recently, higher interest rates have weighed on growth. At a time of challenging economic conditions, the population is growing at the fastest rates in decades – almost entirely through immigration – which is boosting the denominator in the per capita calculation.
Still, many analysts have said that weaker results aren’t merely a function of the business cycle.
For decades, Canada has struggled with lacklustre capital investment. A Statscan report published in February noted that investment per worker in 2021 was 20 per cent lower than in 2006. During that period, there was a sharp decline in firm entry rates, resulting in weaker competition between companies – and thus, less incentive for them to invest.
Business investment is a critical ingredient for boosting labour productivity, or output per hour worked. In practice, this means workers have more tools at their disposal to help them work more efficiently.
Productivity is the bedrock of per capita growth. Over the four decades leading up to the pandemic, increases in productivity accounted for 93 per cent of the improvement in real GDP per capita, Wednesday’s report said. (Economies can also boost per capita output via higher employment rates and the average employee working longer hours, although these have played a small role in Canada’s long-term gains.)
The trouble for Canada is that labour productivity has faltered of late: While it nudged higher over the final three months of 2023, that followed six consecutive quarters of decline.
“Higher productivity should be everyone’s goal because it’s how we build a better economy for everyone,” Ms. Rogers said in her speech in March. “When a business gives workers better tools and better training, those workers can produce more. That, in turn, means more revenue for the business, which allows it to absorb rising costs, including higher wages, without having to raise prices.”
In its recent budget, the federal government pushed back on some of the pessimism regarding the decline in per capita output. Because newcomers typically earn less than the average Canadian, the government said that the recent influx of people is weighing on average income and productivity. “This should not be misinterpreted to imply that those already in the country are becoming worse off,” the budget read.
Still, the government is now trying to curtail migration to the country, related to concerns over how effectively Canada is absorbing newcomers in key areas, such as housing.
In its latest projections, the Bank of Canada said it expects GDP per capita to decline in the first half of 2024, before picking up in the second half of the year and into early 2025. The central bank said the improvement would be driven by easing financial conditions – the bank is widely expected to lower its policy interest rate around the middle of the year – and rising confidence among consumers and businesses.
Since 1981, real GDP per capita has risen by an average annual rate of 1.1 per cent, the Statscan report said. To return to the long-term trend by 2033, Canada will need to experience a decade of above-average growth.
Strong expansions are not unheard of. From 1991 to 2001, Canada’s real GDP per capita rose at an average annual rate of 2.2 per cent, the Statscan paper said. The implementation of the Canada-U.S. Free Trade Agreement and the adoption of digital technologies helped to spur gains in productivity in the 1990s.
The Statscan authors said it’s an open question of whether emerging technologies will usher in a new era of stronger productivity.
“The ability of Canadian companies to harness the benefits of new competitive technologies related to artificial intelligence, robotics and digitalization will be critical to the link between investment and productivity in the coming years and potentially important contributors to changes in living standards,” they wrote.
