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Royal Gold (RGLD) Q4 Earnings Top, Up Y/Y on Higher Prices

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Royal Gold, Inc. (RGLD - Free Report) reported adjusted earnings per share of 53 cents in fourth-quarter fiscal 2020 (ended Jun 30, 2020), beating the Zacks Consensus Estimate of 50 cents. Notably, the company had reported earnings per share of 44 cents in the prior-year quarter.

Including one-time items, the company reported earnings of 75 cents compared with 40 cents in the prior year quarter.

The company generated revenues of $120 million, up 4% year over year. While stream revenues declined 5% year over year to $86 million, royalty revenues were up 35% to $34 million year over year. Gains from higher average gold and silver prices, and higher royalty revenues primarily from Peñasquito and Cortez were negated by lower average copper price and reduced sales volumes from the stream segment, mainly gold stream sales volumes at Andacollo, Mount Milligan and Pueblo Viejo.

Royal Gold, Inc. Price, Consensus and EPS Surprise

Royal Gold, Inc. Price, Consensus and EPS Surprise

Royal Gold, Inc. price-consensus-eps-surprise-chart | Royal Gold, Inc. Quote

The company’s cost of sales were down 13% year over year to $21 million in the fiscal fourth quarter, primarily due to lower gold sales from Andacollo, Mount Milligan and Pueblo Viejo, partially offset by increased gold prices.

General and administrative expenses rose 3% to $7 million from the $6 million in the prior-year quarter. Adjusted EBITDA was $92 million, up from the $85 million in the year-ago period.

Financial Position

Net cash from operating activities was $341 million in the fiscal 2020 compared with the prior-fiscal’s $253 million. The company paid out dividends worth $71.5 million during fiscal 2020 and has increased dividend for the 19th consecutive year.  Royal Gold ended fiscal 2020 with $319 million cash in hand, up from the $119 million at the end of fiscal 2019.

As of the end of the fiscal 2020, the company’s total debt was $300.4 million, up from the $214.5 million at the end of fiscal 2019. As of Jun 30, 2020, Royal Gold had $695 million available and $305 million outstanding under the revolving credit facility.

Operational Highlights

Royal Gold reported volume of 70,100 GEOs (Gold Equivalent Ounces), down 20.7% from the year-earlier quarter. In fiscal 2020, Royal Gold reported volumes of 320,000 GEOs.

Fiscal 2020 Performance

Royal Gold reported adjusted earnings per share of $2.47 in fiscal 2020, up 64% year over year driven by increase in revenues, lower interest expenses and discrete income tax benefits. The bottom line surpassed the Zacks Consensus Estimate of $2.43. Including one-time items, the company reported earnings of $3.03 compared with $1.43 in fiscal 2019.

The company’s revenues improved 18% year over year to a record $499 million, which came in line with the Zacks Consensus Estimate.  Increase in stream revenues and a higher average gold and silver prices drove revenues in the fiscal.

Price Performance

Over the past year, Royal Gold has gained 7.4% compared with the industry’s rally of 52.7%.

Zacks Rank & Other Stocks to Consider

Royal Gold currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Coeur Mining Inc. (CDE - Free Report) , Commercial Metals Company (CMC - Free Report) and The Scotts MiracleGro Company (SMG - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Coeur Mining has an expected earnings growth rate of a whopping 138.7% for 2020. The company’s shares have surged 57% over the past year.

Commercial Metals has a projected earnings growth rate of 15% for the current year. The company’s shares have gained 41% in a year’s time.

Scotts MiracleGro has an estimated earnings growth rate of 44.5% for the ongoing year. Its shares have appreciated 42% in the past year.

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