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Silver Wheaton (TSX: SLW) Prepares for Fourth Quarter Earnings

Written By Brian Hicks

Posted November 7, 2012

Monday, Silver Wheaton Corp. (TSX: SLW) reported third-quarter earnings that dropped below analysts’ estimates, largely due to irregularities between ounces sold and timing of shipments. But the company stated that cash flow and dividends both will increase through the last three months of this year as sales begin to catch up with production.

From Bloomberg:

“We’ve already seen a bunch of shipments from these mines where inventory did build up,” Chief Executive Officer Randy Smallwood said today in a phone interview. The fourth quarter is “always a good one in terms of inventory” as mining companies push sales to improve year-end earnings, he said.

Production was up in the third quarter, rising to 7.69 million ounces of silver. But sales of the metal rose less than 1 percent to just 5.14 million ounces.

Sales dropped by 13 percent to $161.3 million. And net income dropped by 11 percent from last year’s $135 million to $119.7 million.

Quarterly dividend was declared at 7 cents a share – down 30 percent from the second quarter. Silver Wheaton hasn’t indicated that it may change its policy of paying out 20 percent of all cash generated from operating activities of the previous quarter.

In Toronto trading, the company’s shares fell 1.4 percent to hit C$38.88 at close of trading on Monday. Silver futures rose 11 percent on the New York Comex so far this year, but Silver Wheaton beat that with a 33 percent increase.