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Goldcorp (GG) Down 2.8% Since Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Goldcorp Inc. (GG - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Goldcorp’s Q2 Earnings Beat, Revenues Miss Estimates
 
Goldcorp reported net earnings of $135 million or 16 cents per share for second-quarter 2017, against a net loss of $78 million or 9 cents per share a year ago. Barring one-time items, adjusted earnings for the quarter was 12 cents per share. The figure beat the Zacks Consensus Estimate of 10 cents.

Goldcorp recorded revenues of $822 million in the reported quarter, missing the Zacks Consensus Estimate of $863 million.

Gold sales went up around 5.3% year over year to 649,000 ounces in the reported quarter and production rose 3.6% to 635,000 ounces.

AISC were $800 per gold ounce (down roughly 25% year over year).

Mining Highlights

At the Penasquito mine, gold production was 123,000 ounces, marking an increase of 241.7% year over year. AISC was $328 per ounce compared with $3,094 in the year-ago quarter.

At the Cerro Negro in Argentina, gold production was 112,000 ounces, marking an increase of 30.2% year over year. AISC was $694 per ounce compared with $808 in the year-ago quarter.

At the Pueblo Viejo mine, gold production was 115,000 ounces, marking an increase of 15% year over year. AISC was $440 per ounce compared with $587 in the year-ago quarter.

Financial Position

As of Jun 30, 2017, Goldcorp had total liquidity of $3 billion, including $0.1 billion in short-term investments and cash and cash equivalents and $2.9 billion credit facility. The company recorded adjusted operating cash flows of $320 million for the second quarter, an increase of 56.9% year over year.

Outlook

According to Goldcorp, its portfolio optimization strategies are continuing to drive net asset value per share. The company aims to achieve a 20% increase in gold reserves, 20% surge in gold production and 20% reduction in AISC over the next five years.   

Goldcorp expects gold production of 2.5 million ounces (+/- 5%) for 2017. The company has revised its outlook for AISC in 2017 to reflect the progress it has made on initiative to realize sustainable annual efficiencies of $250 million by mid-2018. AISC for 2017 has been projected at $825 per ounce (+/- 5%), down from $850 per ounce expected earlier.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed an upward trend in fresh estimates. There have been two upward revisions for the current quarter.

Goldcorp Inc. Price and Consensus

 

Goldcorp Inc. Price and Consensus | Goldcorp Inc. Quote

VGM Scores

At this time, Goldcorp's stock has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is suitable for growth and momentum investors.

Outlook

Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.




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