Markets

Franco-Nevada (FNV) Q4 Earnings & Revenues Miss Estimates

Franco-Nevada CorporationFNV delivered adjusted earnings of $44.7 million or 24 cents per share in fourth-quarter 2018, down from the $52.1 million or 28 cents per share reported in the prior-year quarter. In addition, the EPS figure marginally missed the Zacks Consensus Estimate of 26 cents.

The company generated revenues of $148.2 million in the reported quarter, down 11.4% year over year. The revenue figure also lagged the Zacks Consensus Estimate of $162 million. In the fourth quarter, 87.7% of the revenues were sourced from gold and gold equivalents (66.3% gold, 10.9% silver, 7.6% platinum group metals and 2.9% other mining assets) and 12.3% from energy (oil, gas and natural gas liquids).

The company sold 104,877 Gold Equivalent Ounces (GEOs) in the quarter, down 12.5% from 119,839 GEOs in the prior-year quarter.

In the Dec-end quarter, adjusted EBITDA was $118.7 million, down 7.3% from $128.0 million witnessed in the comparable period last year.

Franco-Nevada Corporation Price, Consensus and EPS Surprise

Franco-Nevada Corporation Price, Consensus and EPS Surprise | Franco-Nevada Corporation Quote

Prices

At the end of the Oct-Dec quarter, average gold price was $1,228 per ounce, approximately 3.6% lower than the year-ago quarter. Silver prices averaged $14.55 per ounce in the quarter, down 12.9% year over year. Platinum too fell 10.7% year over year to $822 per ounce, while palladium prices were up 16.5% year over year to $1,157 per ounce.

Financial Position

Franco-Nevada's cash and cash equivalents fell to $69.7 million at the end of 2018, down substantially from the $511 million reported at the end of 2017. The company recorded operating cash flow of $474.8 million in 2018 compared with $488.6 million in 2017.

Franco-Nevada's board of directors has announced a quarterly dividend of 24 cents per share. This dividend will be paid on Mar 28, to shareholders of record on Mar 14, 2019.

2018 Results

Franco-Nevada reported adjusted earnings per share of $1.17 in 2018, up 8.3% from prior year's $1.08. The reported figure, however, missed the Zacks Consensus Estimate of $1.18.

Sales decreased 3.2% year over year to $653.2 million in 2018. Also, the top-line figure missed the Zacks Consensus Estimate of $663.6 million. In 2018, Franco-Nevada's backlog was up 19%. The company sold 447,902 GEOs in 2018, down 10% year over year.

2019 Guidance

Franco-Nevada expects attributable royalty and stream production to total 465,000-500,000 GEOs from its mining assets. The company anticipates revenues between $70 million and $85 million from its energy assets, down from the previous guidance of $85-$88 million. It forecasts WTI oil price to average $55 per barrel. It estimates depletion expense of $295-$325 million.

Five-Year Outlook

Subsequent to the end of the third quarter, Franco-Nevada had made the final installment of the $1-billion funding commitment for the Cobre Panama project. The company expects this project to reach its initial-mill throughput capacity of 85 million tonnes per year, before 2023. Franco-Nevada expects to produce nearly 570,000-610,000 GEOs by 2023. Energy revenues, at WTI oil price of $55 per barrel, are estimated between $140 million and $160 million.

Shares of Franco-Nevada have gained 7.4%, over the past year, outperforming the industry 's growth of 1.8%.

Zacks Rank & Stocks to Consider

Franco-Nevada currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Basic Materials sector are Ingevity Corporation NGVT , Innospec Inc. IOSP and Materion Corporation MTRN , each sporting a Zacks Rank #1 (Strong Buy), currently. You can see the complete list of today's Zacks #1 Rank stocks here.

Ingevity has an expected earnings growth rate of 17.9% for 2019. The company's shares have rallied 34.1%, over the past year.

Innospec has a projected earnings growth rate of 3.5% for the current year. The stock has appreciated 14.3% in a year's time.

Materion has an estimated earnings growth rate of 12.6% for 2019. The company's shares have gained 5.6%, in the past year.

This Could Be the Fastest Way to Grow Wealth in 2019

Research indicates one sector is poised to deliver a crop of the best-performing stocks you'll find anywhere in the market. Breaking news in this space frequently creates quick double- and triple-digit profit opportunities.

These companies are changing the world - and owning their stocks could transform your portfolio in 2019 and beyond. Recent trades from this sector have generated +98% , +119% and +164% gains in as little as 1 month.

Click here to see these breakthrough stocks now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Innospec Inc. (IOSP): Free Stock Analysis Report

Ingevity Corporation (NGVT): Free Stock Analysis Report

Franco-Nevada Corporation (FNV): Free Stock Analysis Report

Materion Corporation (MTRN): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

MTRN IOSP FNV NGVT

Other Topics

Earnings Stocks

Latest Markets Videos