Silver Standard Resources Inc. (NASDAQ: SSRI) said Monday its fourth-quarter profit plunged 99.3 percent from the year-earlier period as the silver miner extracted less silver than a year ago and saw labor and equipment replacement costs balloon.
The Vancouver-based company earned $2.6 million, or 3 cents per share, for the quarter ended Dec. 31, compared with $361.6 million, or $4.56 per share in the fourth quarter of 2010.
The results, however, did beat analyst expectations for a loss of 12 cents per share.
Revenue was $14.4 million for the quarter, down from $45.1 million a year ago, as the company extracted considerably less silver from its main mine in Argentina -- 1.75 million ounces versus 2.01 million a year ago. Cash costs per ounce increased to $17.72 per ounce, from $16.07 per ounce in the comparable 2010 quarter.
In a statement announcing the earnings, the company focused on the more positive yearly, rather than the quarterly, results. Net earnings were down to $80.1 million, or $1.00 per share, for 2011, when compared to $338.5 million, or $4.34 per share, in 2010.
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But revenue climbed, up 31.6 percent to $147.8 million, from $112.3 million in 2010.
Silver production was up 12 percent for the year to 7.06 million ounces in 2011 from 6.3 million ounces the year before.
That discrepancy between revenue growth and earnings decrease was due to a substantial spike in costs. Total cash cost in 2011 were $20.93 per ounce of silver, compared to $18.03 per ounce of silver in 2010.
2011 was a significant year in building the foundation for the future, John Smith, CEO of Silver Standard, said in a statement. At Pirquitas, we resolved the technical issues and the focus going forward is on producing consistently, managing costs and extending the mine life.
The company also noted it would be adopting a provision meant to deflect hostile takeover attempts, subject to approval at the next annual shareholders' meeting.
Shares of Silver Standard Resources, Inc., which were up a stunning 8.9 percent during early-morning trading in the North American electronic market, surrendered nearly all intra-day gains by midday before dipping into negative territory, and were recently down 6 cents to $15.44. The reference silver futures contract to which most miners track, for May delivery, was down 1.76 percent for the day.