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Why Shares of Coeur Mining Plunged 11% in April

By Scott Levine - May 5, 2021 at 1:05PM

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One factor led this silver and gold producer to lose luster in investors' eyes last month.

What happened

Extending their 13% slide through the first three months of 2021, shares of Coeur Mining (CDE -2.79%) continued to tumble in April, falling 11%, according to data provided by S&P Global Market Intelligence.

For most of April, things seemed to be going well for shareholders; Coeur Mining's stock had risen more than 6% -- consistent with the nearly 8% rise in the price of silver over the same period. Investor enthusiasm, however, failed to compensate for the disappointing first-quarter 2021 earnings report that the company released in late April.

A pen rests on a financial report.

Image source: Getty Images.

So what

What was so disastrous in the company's Q1 2021 earnings report that it sent investors reeling? For one, Coeur Mining failed to meet analysts' expectations on both the top and bottom lines. Reporting revenue of $202 million, Coeur came up short of the $210 million that analysts expected the company to generate, and it reported adjusted EPS of $0.06, a shade below the expected $0.08.

Besides these misses, investors were disappointed with the company's inability to generate green from its production of silver and gold. In the recently completed quarter, Coeur Mining reported negative $4.4 million in cash from operations. While this was an improvement over the negative $8 million in operational cash flow that the company reported during the same period last year, it was substantially lower than the positive $67 million in operational cash flow that the company reported in Q4 2020.

Addressing the declining cash flow, management attempted to inspire confidence that the company would return to generating strong cash flow in the near future. On the Q1 2021 conference call, CFO Thomas Whelan said, "We forecast to return to stronger operating cash flow over the remainder of 2021 to help fund the planned capital expenditures at Rochester and our aggressive exploration Program."

Now what

Evidently, investors seem to have shaken off their disappointment in the company's first quarter of the new year, sending shares up more than 6% so far through the first week of May. In the coming quarters, investors interested in this gold and silver mining company will want to pay particular attention to the company's progress in expanding the Rochester mine in Nevada -- a project that management contends will help "drive an anticipated step change in production and cash flow."

Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Coeur Mining, Inc. Stock Quote
Coeur Mining, Inc.
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