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Pan American Silver Corp. (USA) (PAAS) Earnings: An Early Look

Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and Pan American Silver Corp. (USA) (NASDAQ:PAAS) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Pan American Silver has suffered through a tough year for mining stocks, as bullion prices have halted their long-term advance and mining companies have faced increasing headwinds from higher costs and other challenges. Let’s take an early look at what’s been happening with Pan American Silver over the past quarter and what we’re likely to see in its quarterly report on Wednesday.

Stats on Pan American Silver

Analyst EPS Estimate $0.37
Change From Year-Ago EPS (39%)
Revenue Estimate $275 million
Change From Year-Ago Revenue 29%
Earnings Beats in Past 4 Quarters 2

Source: Yahoo! Finance.

Will Pan American Silver shine brighter?
Analysts have had mixed views on Pan American Silver over the past few months. Although consensus earnings-per-share estimates for the just-finished quarter have risen by $0.02, analysts have cut their 2013 full-year EPS views by a much greater $0.15. Perhaps as a result, the stock has fallen about 8% since mid-November.

Pan American has made a massive strategic shift recently, one that has started to play out over the past quarter. Deciding to defer developing its Navidad mine in Argentina pending a better deal with local regulators, Pan American has instead pushed toward organic growth at its Dolores, Waterloo, and La Colorada mines. How those projects perform will be a key determinant of Pan American’s future success.

An interesting recent development involves Pan American’s past proposed joint venture with Orko Silver at the La Preciosa mine. Pan American walked away from the deal after deciding that it probably wouldn’t pan out for the company. But recently, La Preciosa has become the target of a bidding war between First Majestic Silver Corp (NYSE:AG) and Coeur d’Alene Mines Corporation (NYSE:CDE), suggesting that Pan American’s initial negative assessment may well have been flawed and calling into question Pan American’s entire strategic vision.