It has been about a month since the last earnings report for Kinross Gold (KGC). Shares have added about 4.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Kinross Gold due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Kinross’ Q3 Earnings Meet Estimates, Revenues Rise Y/Y
Kinross delivered net earnings of $60.9 million or 5 cents per share in third-quarter 2019 against loss of $104.4 million or 8 cents in the year-ago quarter.
Barring one-time items, adjusted earnings were 8 cents per share, meeting the Zacks Consensus Estimate.
Revenues rose 16.3% year over year to $877.1 million on higher average realized gold prices.
Operational Performance
Attributable gold production and sales were 608,033 and 592,689 ounces, up 3.7% and down 4.2% year over year, respectively.
Production cost of sales per gold equivalent ounce fell 5.4% year over year to $735 in the quarter. All-in sustaining cost per gold equivalent ounce sold declined 2% year over year to $1,028.
Margin per gold equivalent ounce sold was $732 in the third quarter, up 69.4% year over year.
Average realized gold prices amounted to $1,467 per ounce, up from $1,209 in the year-ago quarter.
Financial Review
Adjusted operating cash flow jumped 100.7% year over year in the third quarter to $295.4 million, supported by higher margins. Cash and cash equivalents were $358 million, down 23.8% year over year.
Long-term debt amounted to $1,836.8 million at the end of the third quarter. Notably, the company has no scheduled debt maturities due until September 2021.
Capital expenditure declined 3.9% year over year to $265.5 million in the third quarter.
Outlook
Kinross stated that it is on track to attain the production target of 2.5 million (+/- 5%) gold equivalent ounces for 2019. All-in sustaining costs are expected to be $995 (+/- 5%) per gold equivalent ounce.
The company also expects to meet the lower end of its 2019 production cost of sales guidance of $730 (+/- 5%) gold equivalent ounces and the higher end of its 2019 capital expenditure projection of $1,050 million (+/- 5%). It anticipates income tax expenses of $175-$195 million on an adjusted basis.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 30.43% due to these changes.
VGM Scores
At this time, Kinross Gold has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Kinross Gold has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Kinross Gold Corporation (KGC): Free Stock Analysis Report
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