About the Company
Established in 1891, and headquartered in Coeur d’Alene, Idaho, Hecla Mining (HL – Snapshot Report) is the largest primary silver producer in the U.S., #3 lead and zinc producer, and a growing gold producer. They own two primary silver mines in Alaska and Idaho and the Casa Berardi gold mine in Quebec. For 2015, their reserves total 173 million ounces of silver and 2.1 million ounces of gold reserves.
The company reported second quarter results on August 6. Revenue for the quarter declined by 11% to $104 million, while adjusted EBITDA decreased 26% to $30 million. During the quarter, 41% of revenue came from gold, 28% from silver, 20% from zinc and 11% from lead. The average realized silver price was down 17% year-over-year, gold 8% and lead 6%, respectively, while average realized for zinc price rose by 2%.
Adjusted loss for the quarter was $0.05 per share, worse than the Zacks Consensus Estimate for a loss of $0.02 per share.
Due to weak outlook, analysts have revised their estimates for the company sharply downwards. Zacks Consensus Estimates for the current and the next fiscal year are now ($0.12) per share and ($0.05) per share respectively, down from ($0.09) per share and $0.01 per share, before the results. Falling estimates sent the stock to a Zacks Rank #5 (Strong Sell).
The Bottom Line
With its diversified revenue stream and strong liquidity position, the company may be able to turn around in the longer-term, but the shorter-term, the outlook for the stock remains cloudy.
In addition to the Zacks Stock Rank of 5, the stock has Style Score of “F” in Momentum and “C” each in Growth and Value. Further, industry rank of 241 out of 265 (Bottom 9%) indicates the likelihood of continued underperformance in short term.
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