Kinross' (KGC) Earnings Beat, Revenues Lag Estimates in Q3

Kinross Gold (NYSE:KGC) Corporation KGC logged a net loss of $44.9 million or 4 cents per share in third-quarter 2021 against a profit of $240.7 million or 19 cents reported in the year-ago quarter.

Barring one-time items, adjusted earnings came in at 7 cents per share that topped the Zacks Consensus Estimate of 5 cents.

Revenues declined 23.8% year over year to $862.5 million. The top line missed the Zacks Consensus Estimate of $889.6 million.

Operational Performance

Attributable gold equivalent ounces produced in the reported quarter totaled 483,060 ounces, down 20% year over year. The downside was mainly due to lower production at Tasiast caused by the suspension of milling operations after the fire in June 2021.

Average realized gold prices were $1,790 per ounce in the quarter, down 6% from the year-ago quarter’s figure.

The production cost of sales per gold equivalent ounce was $870 in the quarter, up from $737 in the prior-year quarter. All-in sustaining cost per gold equivalent ounce sold rose 27.9% year over year to $1,225, mainly due to a decline in ounces sold.

Margin per gold equivalent ounce sold was $920 in the quarter, down from the prior-year quarter’s level of $1,171.

Financial Review

Adjusted operating cash flow declined 65.3% year over year in the third quarter to $190.5 million. Cash and cash equivalents were $586.1 million as of Sep 30 compared with $1210.9 million as of Dec 31, 2020.

Long-term debt was $1,398.7 million at the end of the third quarter, down from $1424.2 million as of Dec 31, 2020.

Outlook

For 2021, Kinross expects to produce 2.1 million (+/- 5%) gold equivalent ounces. It expects to meet its revised production cost of sales guidance of $830 per gold equivalent ounce.

All-in sustaining cost per ounce for 2021 is projected at $1,110. Capital expenditures are predicted at around $900 million (+/- 5%) for this year.

In 2022 and 2023, the company expects annual production to increase to 2.7 and 2.9 million gold equivalent ounces, respectively.

Price Performance

Shares of Kinross have declined 18.6% in the past year compared with a 16% fall of the industry.

Image Source: Zacks Investment Research

Zacks Rank & Key Picks

Kinross currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Nucor Corporation (NYSE:NUE) NUE, The Chemours Company (NYSE:CC) CC and Dow Inc. DOW.

Nucor has an expected earnings growth rate of 583.5% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised 18.1% upward in the past 60 days.

Nucor beat the Zacks Consensus Estimate for earnings in two of the last four quarters, while missing twice. The company has a trailing four-quarter earnings surprise of roughly 2.7%, on average. Its shares have also rallied around 122.4% over a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has an expected earnings growth rate of 105.1% for the current year. The Zacks Consensus Estimate for the current year has been revised 10% upward in the past 60 days.

Chemours beat the Zacks Consensus Estimate for earnings in all of the last four quarters. The company has a trailing four-quarter earnings surprise of roughly 34.2%, on average. Its shares have also rallied around 44.4% over a year. It currently sports a Zacks Rank #1.

Dow has a projected earnings growth rate of 447% for the current year. The consensus estimate for the current year has been revised 8.7% upward in the past 60 days.

Dow beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 14.1%. The company’s shares have gained around 15% in a year. It currently flaunts a Zacks Rank #1.

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