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Kinross' (KGC) Q2 Earnings Meet, Revenues Lag Estimates

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Kinross Gold Corporation (KGC - Free Report) logged profits of $119.3 million or 9 cents per share in second-quarter 2021, down from $195.7 million or 15 cents reported in the year-ago quarter.

Barring one-time items, adjusted earnings came in at 12 cents per share that were in line with Zacks Consensus Estimate.

Revenues inched down 0.6% year over year to $1,000.9 million. The top line missed the Zacks Consensus Estimate of $1020.8 million.

Kinross Gold Corporation Price, Consensus and EPS Surprise

 

Kinross Gold Corporation Price, Consensus and EPS Surprise

Kinross Gold Corporation price-consensus-eps-surprise-chart | Kinross Gold Corporation Quote

 

Operational Performance

Attributable gold equivalent ounces produced in the reported quarter totaled 538,091 ounces, down 6% year over year. The downside was mainly due to lower production at Tasiast, Bald Mountain and Kupol. This was partly offset by higher production at Paracatu and Fort Knox.

Average realized gold prices were $1,814 per ounce in the quarter, up 6% from the year-ago quarter’s figure.

Production cost of sales per gold equivalent ounce was $830 in the quarter, up from $725 in the prior-year quarter. All-in sustaining cost per gold equivalent ounce sold rose 8.6% year over year to $1,069, primarily due to higher cost of sales per gold equivalent ounce sold and lower production.

Margin per gold equivalent ounce sold was $984 in the quarter, down from the prior-year quarter’s level.

Financial Review

Adjusted operating cash flow declined 14.6% year over year in the second quarter to $363.8 million. Cash and cash equivalents were $675.6 million as of Jun 30, compared with $1,527.1 in the prior-year quarter.

Long-term debt was $1,397.4 million at the end of the second quarter, down 47.7% year over year. 

Outlook

For 2021, Kinross expects to produce 2.1 million (+/- 5%) gold equivalent ounces. It has revised production cost of sales guidance to $830 per gold equivalent ounce, from the earlier guidance of $790.

All-in sustaining cost per ounce for 2021 is now 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 around 2.7 and 2.9 million gold equivalent ounces, respectively.

Price Performance

Shares of Kinross have declined 27.8% in the past year compared with 24% fall of the industry.

Zacks Investment Research
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 (NUE - Free Report) , Dow Inc. (DOW - Free Report) and Cabot Corporation (CBT - Free Report) .

Nucor has a projected earnings growth rate of around 490.1% for the current year. The company’s shares have surged 132.7% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Dow has an expected earnings growth rate of around 403.01% for the current year. The company’s shares have gained 48.3% in the past year. It currently carries a Zacks Rank #2.

Cabot has an expected earnings growth rate of around 137.5% for the current fiscal. The company’s shares have surged 45.7% in the past year. It currently flaunts a Zacks Rank #1.


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