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Kinross (KGC) Tops Earnings and Revenue Estimates in Q3
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Gold miner Kinross Gold Corporation (KGC - Free Report) reported net profit of $60.1 million or 5 cents per share in third-quarter 2017, compared with $2.5 million or break-even earnings recorded in the year-ago quarter.
Adjusted earnings (excluding one-time items) was $84.1 million or 7 cents per share, compared with $128.7 million or 10 cents recorded a year-ago. Earnings per share beat the Zacks Consensus Estimate of 2 cents per share.
Revenues of $828 million in the quarter fell around 9% from $910.2 million recorded in the year-ago quarter owing to lower average realized gold price and lower gold equivalent ounces sold. However, revenues topped the Zacks Consensus Estimate of $796.8 million.
According to Kinross, third-quarter results benefited from the outperformance at two Nevada mines and the Tasiast mine.
Kinross Gold Corporation Price, Consensus and EPS Surprise
Attributable gold production was 653,993 ounces for the quarter, down 4.4% year over year. Production cost of sales per gold equivalent ounce declined to $662 from $719 recorded in the prior-year quarter, primarily due to lower cost of sales per ounce at Round Mountain, Fort Knox and Bald Mountain. All-in sustaining cost per gold equivalent ounce sold fell to $937 from $1,001 a year ago.
Margin per gold equivalent ounce sold was $621 in the quarter, up from $617 a year ago.
Average realized gold prices fell to $1,283 per ounce in the quarter, down 4% year over year from $1,336.
Financial Review
Adjusted operating cash flow was $320.8 million, almost unchanged from $320.3 million in the prior-year quarter. Cash and cash equivalents were $992.1 million as of Sep 30, 2017, up from $765.4 million as of Sep 30, 2016.
Long-term debt was essentially flat year over year at $1,732 million and there are no scheduled debt repayments due for the company until 2021.
Capital expenditures rose to $204.7 million in the quarter from $153.8 million in the prior-year quarter owing to Tasiast Phase One expansion project costs and higher spending at Fort Knox, partially offset by lesser spending at Kupol.
Development Updates
Kinross, in September, announced that it is proceeding with the Round Mountain Phase W and Tasiast Phase Two expansion projects. While Phase W is anticipated to extend mine life at Round Mountain by five years, Phase Two is likely to transform Tasiast into a large, world-class mine with low cost.
Kinross continues to progress with the Phase One expansion of the Tasiast mine and remains on track with its full commercial production, which is expected to begin in second-quarter 2018. The construction of the plant is 77% complete, crusher installation has begun and conveyor installation is under progress for both SAG feed and stockpile.
Kinross also continues to progress with detailed engineering work at the Vantage Complex in the South area at Bald Mountain. Overall engineering is 70% complete, initial construction is on schedule to start in first-quarter 2018 and permit process is in progress.
The company has also completed construction of surface infrastructure at the Moroshka project with twin declines development on schedule.
Outlook
For 2017, Kinross is tracking towards the top end of its earlier announced gold production guidance range of 2.5-2.7 million gold equivalent ounces. The overall production cost of sales and all-in sustaining cost are also tracking towards the bottom end of the earlier announced guidance range of $660-$720 per gold equivalent ounce and $925-$1,025 per gold equivalent ounce, respectively.
Kinross expects to meet its capital expenditure target roughly $900 million (+/- 5%).
Price Performance
Shares of Kinross have moved up 7.2% in last six months, outperforming the 1.2% growth recorded by its industry.
Sociedad Quimica has an expected long-term earnings growth rate of 32.5%.
FMC has an expected long-term earnings growth rate of 11.3%.
Westlake Chemical has an expected long-term earnings growth rate of 8.4%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Kinross (KGC) Tops Earnings and Revenue Estimates in Q3
Gold miner Kinross Gold Corporation (KGC - Free Report) reported net profit of $60.1 million or 5 cents per share in third-quarter 2017, compared with $2.5 million or break-even earnings recorded in the year-ago quarter.
Adjusted earnings (excluding one-time items) was $84.1 million or 7 cents per share, compared with $128.7 million or 10 cents recorded a year-ago. Earnings per share beat the Zacks Consensus Estimate of 2 cents per share.
Revenues of $828 million in the quarter fell around 9% from $910.2 million recorded in the year-ago quarter owing to lower average realized gold price and lower gold equivalent ounces sold. However, revenues topped the Zacks Consensus Estimate of $796.8 million.
According to Kinross, third-quarter results benefited from the outperformance at two Nevada mines and the Tasiast mine.
Kinross Gold Corporation Price, Consensus and EPS Surprise
Kinross Gold Corporation Price, Consensus and EPS Surprise | Kinross Gold Corporation Quote
Operational Performance
Attributable gold production was 653,993 ounces for the quarter, down 4.4% year over year. Production cost of sales per gold equivalent ounce declined to $662 from $719 recorded in the prior-year quarter, primarily due to lower cost of sales per ounce at Round Mountain, Fort Knox and Bald Mountain. All-in sustaining cost per gold equivalent ounce sold fell to $937 from $1,001 a year ago.
Margin per gold equivalent ounce sold was $621 in the quarter, up from $617 a year ago.
Average realized gold prices fell to $1,283 per ounce in the quarter, down 4% year over year from $1,336.
Financial Review
Adjusted operating cash flow was $320.8 million, almost unchanged from $320.3 million in the prior-year quarter. Cash and cash equivalents were $992.1 million as of Sep 30, 2017, up from $765.4 million as of Sep 30, 2016.
Long-term debt was essentially flat year over year at $1,732 million and there are no scheduled debt repayments due for the company until 2021.
Capital expenditures rose to $204.7 million in the quarter from $153.8 million in the prior-year quarter owing to Tasiast Phase One expansion project costs and higher spending at Fort Knox, partially offset by lesser spending at Kupol.
Development Updates
Kinross, in September, announced that it is proceeding with the Round Mountain Phase W and Tasiast Phase Two expansion projects. While Phase W is anticipated to extend mine life at Round Mountain by five years, Phase Two is likely to transform Tasiast into a large, world-class mine with low cost.
Kinross continues to progress with the Phase One expansion of the Tasiast mine and remains on track with its full commercial production, which is expected to begin in second-quarter 2018. The construction of the plant is 77% complete, crusher installation has begun and conveyor installation is under progress for both SAG feed and stockpile.
Kinross also continues to progress with detailed engineering work at the Vantage Complex in the South area at Bald Mountain. Overall engineering is 70% complete, initial construction is on schedule to start in first-quarter 2018 and permit process is in progress.
The company has also completed construction of surface infrastructure at the Moroshka project with twin declines development on schedule.
Outlook
For 2017, Kinross is tracking towards the top end of its earlier announced gold production guidance range of 2.5-2.7 million gold equivalent ounces. The overall production cost of sales and all-in sustaining cost are also tracking towards the bottom end of the earlier announced guidance range of $660-$720 per gold equivalent ounce and $925-$1,025 per gold equivalent ounce, respectively.
Kinross expects to meet its capital expenditure target roughly $900 million (+/- 5%).
Price Performance
Shares of Kinross have moved up 7.2% in last six months, outperforming the 1.2% growth recorded by its industry.
Zacks Rank & Stocks to Consider
Kinross currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Sociedad Quimica y Minera S.A. (SQM - Free Report) , FMC Corporation (FMC - Free Report) and Westlake Chemical Corporation (WLK - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Sociedad Quimica has an expected long-term earnings growth rate of 32.5%.
FMC has an expected long-term earnings growth rate of 11.3%.
Westlake Chemical has an expected long-term earnings growth rate of 8.4%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>