What to Expect When Silver Wheaton Reports Earnings This Week

What will Silver Wheaton deliver for shareholders next week?

| More on:
The Motley Fool
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Silver Wheaton (TSX: SLW)(NYSE: SLW) is scheduled to publish its quarterly earnings report on Thursday. Following the plunge in precious metal prices last years, the resource industry has been thrown into turmoil. Yet while miners struggle for survival, streaming metal companies like Silver Wheaton have thrived by fronting desperately needed capital to cash-strapped partners.

The question for investors is whether the string of good deals can continue. Let’s take a peek at what has been happening at Silver Wheaton over the past couple of months and what we can expect in this upcoming report.

Stats on Silver Wheaton

Analyst EPS Estimate


Year-Ago Estimate


Revenue Estimate


Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance

What will Silver Wheaton deliver for shareholders next week?

In recent months analysts have been steadfast in their views on Silver Wheaton’s earnings keeping their March quarter and full-year estimates unchanged. The stock has been trading in lockstep, up about 3% over the past 90 days.

Silver Wheaton doesn’t own or operate a single mine. Rather, the company’s business model involves financing new projects for cash-hungry companies in exchange for the rights to buy future metal production at a discount to market prices. This model often works best when metal prices are down because that’s when it can reach the best terms on its streaming finance deals.

Silver Wheaton has been taking full advantage of the crisis in the mining industry. Last November, the company entered into a gold stream agreement with Sandspring Resources. According to the terms of that agreement, Silver Wheaton advanced $13.5 million to the junior miner in exchange for the rights to purchase 10% of the gold production from Sandspring’s Toroparu project in Guyana.

The same month, the company entered into another deal with Hudbay Minerals (TSX: HBM)(NYSE: HBM). In that deal, HudBay will sell 50% of the gold from Constancia to Silver Wheaton at U.S. $400 per ounce in exchange for an upfront payment of U.S. $135 million.The fact that a large, established miner like Hudbay is turning to Silver Wheaton for financing shows just how tough industry conditions have become.

However, it’s not all roses for Silver Wheaton. Many of the company’s streaming partners have struggled in the face of weak metal prices, and that threatens to put a number of deals in jeopardy.

For instance, Barrick Gold (TSX: ABX)(NYSE: ABX) announced late last year that it would halt development of its flagship Pascua-Lama mining project. That has forced Silver Wheaton to revise its 2017 guidance to reflect the extended time frame until the mine begins production. While Chief Executive Randy Smallwood is confident Barrick will complete the project, the deal could still turn into a money loser for Silver Wheaton if it doesn’t become operational by 2016.

Moreover, with precious metal prices rallying sharply over the past couple of months, miners are starting to demand more value from Silver Wheaton in negotiations. That could result in lower returns or put a halt to the company’s deal making.

What’s next for Silver Wheaton?

In Silver Wheaton’s upcoming report, listen to hear how the company is planning to navigate the current market environment. Also, listen for colour on some of the company’s troubled deals, namely Barrick’s Pascua-Lama project and Augusta’s Rosemont mine.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robert Baillieul has no positions in any of the stocks mentioned in this article.

More on Investing

Dots over the earth connecting the world
Dividend Stocks

3 of the Top-Growing Stocks on Earth

Market volatility remains high in Q3 2022, but it’s easy to identify the top-growing stocks on Earth.

Read more »

Profit dial turned up to maximum
Dividend Stocks

1 Undervalued Canadian Dividend Stock to Buy for TFSA Passive Income and Total Returns

This cheap Canadian energy stock provides an attractive dividend yield for TFSA passive income and a shot at some big…

Read more »

money cash dividends
Dividend Stocks

Want Passive Income? 1 TSX Stock for $8/Day in Dividends

If you need cash right away, then this TSX stock can make you passive income from a stable dividend that…

Read more »

edit Balloon shaped as a heart
Dividend Stocks

My 3 Favourite TSX Dividend Stocks Right Now

Canadian dividend stocks make for great long-term buy-and-hold investments.

Read more »

value for money
Dividend Stocks

3 Incredibly Cheap Dividend Stocks to Buy for Dependable Passive Income

Now is an excellent time to load up on Canadian dividend stocks. Here are top picks that are all trading…

Read more »

A close up image of Canadian $20 Dollar bills
Dividend Stocks

3 Simple TSX Stocks to Buy With $25 Right Now

Canadians with capital of as low as $25 can purchase three simple stocks right now and earn recurring passive income…

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

2 No-Brainer U.S. Stocks for Investors in August

Here are two undervalued U.S. stocks to diversify your investment portfolio. They both pay safe and growing dividends!

Read more »

Tech Stocks

Got $300? 2 Simple TSX Stocks to Buy Right Now

Investing whatever little sum you have saved up as soon as possible is one of the best ways to keep…

Read more »