Wheaton’s (WPM) Profits Nearly Doubled While Its Cash Pile Shrank To $100M

Wheaton Precious Metals (NYSE:WPM) reported record second-quarter net earnings of $543 million on $929 million of revenue, a nearly doubling of profits. Overall, net earnings rose 106% to $1.1 billion in the first half. The company made $4.5 billion in net upfront cash payments related to mineral stream interests, and now carries $2.0 billion of total debt against $100 million in cash on hand.

Wheaton's gold equivalent ounces sold increased by 14% compared to the previous year, while the average realized gold equivalent price jumped 61% in Q2, driving the revenue surge. Despite costs per ounce rising from $406 to $568, the cash operating margin per ounce still grew 65% to $3,875, outpacing gold price appreciation. Operating cash flow reached $650 million in the quarter and $1.4 billion for the half.

The company has only about 3% of this year's production from assets still in construction or ramp-up, and forecasts production to rise by roughly 50% to 1.2 million gold equivalent ounces by 2030. Wheaton expanded its share of silver production from Antamina to 67.5% through the newly acquired BHP Antamina PMPA. However, growth comes with costs.

Wheaton had no bank debt at the end of 2025, but drew $1.5 billion on a new two-year term loan to finance Antamina and now has net debt at $1.9 billion. Taxes have also increased, with a $109 million global minimum tax payment in June and another Cdn$346 million due in March 2027.

While gold ounce production slipped 2.6% year-over-year, the 6% increase in gold equivalent production relied heavily on Antamina. Salobo output fell 11% due to lower grades, and Constancia output dropped 35% after the Pampacancha pit's higher-grade mining concluded in Q4 2025. Hemlo Mining reported a decline in output, and Rio2 mentioned a missed planned tonnes and grade in Q1. The revenue growth primarily came from higher prices, which also amplifies risks if metal prices decline.

Hedge funds holding Wheaton decreased from 37 to 32 in the latest quarter, suggesting institutions are reducing exposure. The stock is priced at 27.10 times forward earnings, assuming much of the pipeline will deliver. While Wheaton efficiently turns higher metal prices into cash, the success of newly acquired and built ounces remains uncertain. The company's potential as an investment is acknowledged, but other AI stocks are believed to offer greater upside and less downside risk.