Is Pan American Silver (PAAS) Poised to Deliver a Q3 Earnings Beat Amid Rising Commodity Prices and Cost Discipline?

The silver and gold markets are heating up, and Pan American Silver (PAAS) finds itself at a critical juncture. With Q3 2025 earnings set to be released on November 12, 2025, investors are scrutinizing whether the company can leverage surging commodity prices and improved cost discipline to deliver a robust earnings beat. This analysis examines PAAS's earnings momentum, production efficiency, and pricing tailwinds to assess its potential to outperform expectations.

Earnings Momentum: A Strong Foundation

PAAS has demonstrated consistent outperformance in recent quarters, with analysts forecasting a 53.1% year-over-year jump in earnings per share (EPS) to 49 cents for Q3 2025, according to a Nasdaq article. This growth is underpinned by a projected 21.2% increase in total sales to $867.8 million, driven by higher silver and gold prices as well as operational improvements, according to the same Nasdaq article. The company has beaten consensus estimates in three of the past four quarters, signaling a resilient earnings trajectory. However, the Zacks model's negative Earnings ESP of -1.15% introduces caution, suggesting potential challenges in exceeding expectations this time, as noted in the Nasdaq article.

Production Efficiency: Silver's Strength, Gold's Struggles

PAAS's production efficiency has been a key differentiator. For silver, the company is expected to produce 5,843 thousand ounces in Q3 2025, a 6.9% year-over-year increase, according to the Nasdaq article. Operational gains at La Colorada (improved ventilation) and El Peñon (higher throughput) have bolstered output, according to the Nasdaq article. Meanwhile, cash costs per ounce for the silver segment are projected to decline to $12.85 from $15.88 in the prior year, reflecting better cost management, as reported in a Nasdaq article.

Gold production, however, faces headwinds. Output is expected to fall 18.2% to 184 thousand ounces, primarily due to the sale of the La Arena mine and reduced activity at Dolores, as noted in the Nasdaq article. Despite this, all-in sustaining costs (AISC) for the gold segment are anticipated to rise modestly to $1,350.82 per ounce, up from $1,195.00 in 2024, according to the Nasdaq article. While gold's contribution to revenue may soften, the silver segment's efficiency gains remain a critical growth driver.

Pricing Tailwinds: Commodity Prices as a Catalyst

The macroeconomic environment has been a boon for PAAS. Silver prices averaged $39.11 per ounce in Q3 2025, up 34% year-over-year, while gold prices averaged $3,448.99 per ounce, a 41% increase, according to a Nasdaq article. These gains are attributed to geopolitical uncertainties, U.S. trade policy concerns, and strong central bank demand, as noted in the Nasdaq article. Analysts project PAAS will realize $39.11 per ounce for silver and $3,448.99 per ounce for gold in the quarter, directly boosting revenue, according to the Nasdaq article.

The combination of higher prices and lower production costs creates a favorable margin environment. For instance, PAAS's 2025 silver AISC guidance of $16.25–$18.25 per ounce is a 14% improvement from 2024's $18.98 per ounce, as reported in a MoneyMorning article. This cost discipline, coupled with by-product gold credits from Cerro Moro, further enhances profitability, according to the MoneyMorning article.

The Verdict: A Beat is Probable, but Not Certain

While PAAS's earnings momentum and cost discipline position it well for a beat, risks remain. The gold segment's underperformance and the Zacks model's negative ESP suggest potential volatility. However, the company's ability to outperform in three of the last four quarters, combined with favorable commodity prices, tilts the odds in favor of a positive surprise. Investors should monitor the earnings report for clarity on production trends and cost guidance, which will shape the stock's near-term trajectory.