Please ensure Javascript is enabled for purposes of website accessibility

Why Coeur Mining Stock Sank Today

By Reuben Gregg Brewer - Apr 29, 2021 at 3:08PM

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

Investors were disappointed in the miner's first-quarter results.

What happened

Shares of Coeur Mining (CDE 0.99%) are falling today, down by 15.3% as of 2:36 p.m. EDT, in wake of the the gold and silver miner releasing first-quarter results after yesterday's market close. Investors are clearly not pleased, but it requires a little extra digging to see why.   

So what

At first blush, Coeur's numbers weren't so bad. First-quarter 2021 revenue came in at roughly $202 million, up significantly from $128 million in the prior-year period. Gold sales rose 8% and silver sales jumped 42%. The realized gold price increased about 11.5% and production was basically flat. The realized silver price soared a massive 57%, helping to offset a production drop of roughly 11%. Net income per share, meanwhile, came in at $0.01 compared to a $0.05-per-share loss in the year-ago period. The company posted adjusted net income of $0.06 per share versus a breakeven result in Q1 2020. All in, that sounds pretty positive.  

A gold miner panning for gold.

Image source: Getty Images.

The problem is that most of the first-quarter results compared unfavorably with Coeur's Q4 performance. For example, revenue fell roughly 11.5% sequentially. Net income dropped from $0.05 per share in the fourth quarter of 2020 to $0.01 per share. The adjusted net income figure of $0.06 per share represented a decline of 25% from Q4. Meanwhile, Wall Street had been expecting net income of $0.08 per share. So the quarterly performance maybe wasn't quite as good as it seemed at first, which makes the stock's slump a lot less surprising.   

Now what

Coeur is also ramping up its capital spending as it looks to develop a large new project, which means there's extra money going out the door right now. It's good news that it is facing these costs at a time when gold and silver prices are relatively high, but it means that elevated expenses will likely depress performance throughout the year, and likely into next year.   

From a big-picture perspective, $2 billion-market-cap Coeur is a relatively small miner, which is a space that most long-term investors should probably avoid. And even if you do venture in, it's probably best to view precious metals miners as a diversification tool instead of a leveraged bet on the movement of gold and silver prices.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Coeur Mining, Inc. Stock Quote
Coeur Mining, Inc.
$3.07 (0.99%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.