Why SSR Mining Stock Popped Today

What happened

Shares of gold miner SSR Mining (SSRM +0.58%) had jumped 9.7% at 2:45 p.m. ET on Wednesday after the company announced this morning that it had met consensus targets for its fourth-quarter earnings and beat expectations on sales quite soundly.

Heading into the quarter, analysts had forecast that SSR would earn $0.46 per share (adjusted) on sales of $382 million in the fourth quarter. And while SSR did indeed report a $0.46 per share profit, it far exceeded analysts' target with $407.9 million in sales.  

Expand

NASDAQ: SSRM

SSR Mining Inc.

Today's Change

(0.58%) $0.14

Current Price

$24.41

Key Data Points

Market Cap

$4.9B

Day's Range

$23.55 - $24.46

52wk Range

$8.65 - $33.49

Volume

703K

Avg Vol

4.1M

Gross Margin

35.73%

So what

That might not exactly sound like good news since SSR Mining did $26 million more business than expected, but didn't make any more profit than predicted. (Earnings declined by about 8% year over year in the quarter.) Still, CEO Rod Antal called the quarterly performance "strong" and noted that it capped off "a year of operational outperformance, strong free cash flow generation and peer-leading capital returns [with] full-year gold equivalent production at the top-end of our 2021 guidance range."  

SSR produced 211,717 gold equivalent ounces in the quarter, and 794,456 ounces for the year, very close to the predicted 800,000 top of its guidance range.

Sales climbed 10% year over year for the quarter, and were up 73% for the year.

Cash from operations was $184.6 million for the quarter and $609 million for the year. Free cash flow came to $148.7 million for the quarter and $444.2 million for the year.

Image source: Getty Images.

Now what

Looking ahead, management did not give new guidance for sales and earnings. It did, however, note that it expects to continue producing between 700,000 and 780,000 gold equivalent ounces annually over the next three years, and to generate strong free cash flow and capital returns. Gold reserves increased 14% over the past year, ensuring the company will have plenty of new gold to mine.

As evidence of how confident the company is in its outlook, SSR raised its quarterly dividend by 40% to $0.07 per share. At that rate, the stock now pays a dividend yield of 1.4%.