Hecla Mining Company (NYSE:HL) is among Monday’s early winners, with HL stock up roughly 6% on a massive surge in first-quarter profits.
Hecla this morning announced that first-quarter 2017 net income rose to $16.73 million, or $4 cents per share, on sales of $142.5 million. The results were up 1,330% from $1.17 million, or 2 cents per share, in last year’s first quarter. Analysts surveyed by Thomson Reuters had forecast earnings of 3 cents a share.
Metals prices increased during the quarter, as average realized silver prices were $17.90 per ounce, 20% higher than the $14.93 price in the first quarter of 2016. Realized gold, lead and zinc prices also increased 3%, 36%, and 59%, respectively.
Bulls can only hope that the Monday boost to HL stock is a sea change in momentum for shares, which have gained just 1% year-to-date against a broadly higher market. It’s also underperforming the iShares Silver Trust (ETF) (NYSEARCA:SLV), which is up about 3% year-to-date.
“We have started 2017 with strong sales, net income and free cash flow, and our silver margins remain among the top in the industry, driving an increase in cash balances and strengthening our balance sheet,” said Phillips S. Baker, Jr., President and CEO, according to a company announcement. “For the remainder of 2017, our focus is on growing reserves and resources, investing in new technologies that will increase productivity, mine life and margins, and advancing the underground at San Sebastian as well as optimizing the open pits at Casa Berardi.
The company said it is also seeking to end a strike at its Lucky Friday mine in Idaho. As a result of the work stoppage, Hecla is lowering Lucky Friday and company-wide estimates for silver production and cost “until it is resolved,” according to the announcement.
Precious metals output increased in the quarter, with total silver production of 4.3 million ounces, up 67%, and silver equivalent production of 10.3 million ounces, up 17%. Gold production increased 19% to 52,126 ounces.
HL stock is trying to escape a pattern of lower highs and lower lows that has been put in place since November 2016.
Coeur D’Alene, Idaho-based Hecla was founded in 1891, and produces silver from mines in Alaska, Idaho and Mexico, and gold from an operating mine in Quebec, Canada. The company has exploration and pre-development silver and gold sites seven North American mining districts. It also produces lead and zinc.