Coeur's sales jumped 77%. Why did profit per share fall?

Coeur Mining's third-quarter sales rose 77% after the acquisition of two Canadian mines. Adjusted earnings per share fell to $0.10 from $0.19 a year earlier, leaving shareholders with less profit for each share despite the much larger business.

The gold, silver and copper producer still generated substantial cash and increased its cash balance. But the latest results show how a bigger share count, acquisition accounting and uneven mine performance complicate the growth story.

The acquisition changes the comparison

Coeur completed its purchase of New Gold on March 20, adding New Afton and Rainy River to its North American portfolio. The acquired business contributed $354.7 million of the latest quarter's $983.6 million in revenue.

Research by Ticker Byline shows that revenue was 3.9% lower on the acquisition's pro forma comparison, which assumes Coeur had owned New Gold since January 1, 2025. That table puts year-earlier combined revenue at $1.024 billion. The hypothetical comparison removes the change in ownership but still reflects metal prices and mine performance.

Coeur also issued approximately 393 million shares to buy New Gold. Its diluted average share count in the latest quarter was about 59.5% larger than a year earlier. Earnings are now spread across more shares.

Dilution is only part of the explanation: total adjusted net income also fell, to $97.8 million from $122.7 million. The larger asset base brought higher depreciation and amortization charges, while $40.4 million of expense from acquired ore inventory remained in adjusted earnings. That expense reflects the higher book value assigned to ore in the acquisition as it is sold.

Reported net income fell to $109.4 million from $266.8 million. The year-earlier figure benefited from a large tax benefit, making that decline steeper than the drop in adjusted profit.

Two new mines still have work to do

New Afton's conveyor failure held back production before repairs were completed in mid-September. Rainy River processed more lower-grade stockpiled ore after heavy rain affected its open pit. Both mines produced less gold than in the second quarter.

There were signs of progress. New Afton has sustained underground mining rates of 16,000 tonnes a day since the repair. Rainy River reached its 5,000-tonne daily underground target during the quarter, although its quarterly average was 3,400 tonnes. Rochester and Wharf increased gold production, and all seven operating mines generated positive free cash flow.

Coeur continues to target the low end of its annual production ranges. That position was already public in September, along with the main operating problems. The latest quarter gives investors a clearer view of the recovery needed to finish the year.

Cash remains strong, with a demanding fourth quarter ahead

Free cash flow, which Coeur calculates as operating cash flow less capital spending, was $240.2 million. That was above the year-earlier $188.7 million but below the second quarter's $387.5 million. Lower realized gold and silver prices, fewer metal sales and payment timing weighed on operating cash compared with the second quarter.

Coeur spent $110.8 million on buybacks during the quarter, roughly 46% of free cash flow. Cash still rose to $1.17 billion at September 30, above the $701.7 million carrying value of its debt, including finance leases.

Management expects more than $1.3 billion of full-year free cash flow at its latest metal-price assumptions. With $894.5 million generated in the first nine months, meeting that expectation would require more than $405.5 million in the fourth quarter.

Mine improvements must contribute while investment continues: the latest presentation implies $175 million to $260 million of fourth-quarter capital spending. A separate insurance settlement is expected to bring in an additional $70 million following last year's Wharf crusher fire.

The next results will test whether steadier production can turn the expanded mine portfolio into stronger profit per share and cash available for shareholder returns. The Coeur Mining company profile follows the acquisition, forecast history, capital spending and cash position.