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Royal Gold (RGLD) Q4 Earnings In Line, Sales Miss Estimates

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Royal Gold, Inc.’s (RGLD - Free Report) adjusted earnings per share of 43 cents per share in fourth-quarter fiscal 2018 came in line with the Zacks Consensus Estimate but was up 39% year over year. 
 
Barring one-time items, the company reported earnings of 41 cents per share in the reported quarter, improving 32% year over year.
 
Royal Gold reported revenues of $116 million in the fiscal fourth quarter, up about 7% from the $109 million reported in the year-ago quarter. Revenue increased due to higher gold and copper prices as well as increased stream sales from Mount Milligan and Pueblo Viejo, partially offset by lower metal sales from Wassa and Prestea, and Andacollo. However, the figure missed the Zacks Consensus Estimate of $118 million.
 
Royal Gold, Inc. Price, Consensus and EPS Surprise
 
Operational Highlights
 
Royal Gold’s volume of 89,000 GEOs (Gold Equivalent Ounces) improved 3% from the prior-year quarter. Average gold price increased 4% to $1,306 per ounce from the year-ago quarter 
 
The company reported costs of sales of $22.2 million in the reported quarter, up from the year-ago quarter figure of $19.7 million. General and administrative expenses increased to $10.9 million, compared with $9.9 million in the prior-fiscal quarter.
 
Fiscal 2018 Performance
 
Royal Gold’s adjusted earnings per share came in at $1.76 in fiscal 2018, beating the Zacks Consensus Estimate of $1.75. Earnings also improved 14% year over year. Including one-time items, the company reported net loss per share of $1.73 in the fiscal compared with $1.55 in the prior year. 
 
Fiscal 2018 revenues were a record $459 million, advancing 4% from the prior fiscal but missed the Zacks Consensus Estimate of $472 million.
 
Financial Position
 
Net cash provided by continuing operating activities increased 23% year over year to $329 million in the fiscal 2018. The company ended the fiscal with roughly $88.8 million cash in hand, up from $86 million at fiscal 2017-end. As of fiscal 2018-end, the company’s total debt was $351 million, lower than $586 million at fiscal 2017 end. The company has paid dividends worth $64 million during the year.
 
Outlook
 
For fiscal 2019, the company expects improved results backed by several positive catalysts, including the beginning of production at Cortez Crossroads, the early deployment of the Peñasquito Pyrite Leach Project and production improvements at Rainy River. It will be aided further by progress at the pilot pre-oxidation plant at Pueblo Viejo, as well as a preliminary economic assessment at the Peak Gold joint venture.
 
 
The company's shares have dropped 4% over the past year, compared with the industry’s decline of 14%.
 
Royal Gold currently carries a Zacks Rank #3 (Hold).
 
Stocks to Consider
 
Some better-ranked stocks in the same sector include Ingevity Corporation (NGVT - Free Report) , KMG Chemicals, Inc. (KMG - Free Report) and Ashland Global Holdings Inc. (ASH - Free Report) . While Ingevity and KMG Chemicals sport a Zacks Rank #1 (Strong Buy), Ashland Global carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
 
Ingevity has a long-term earnings growth rate of 12%. The stock has surged 74% in a year’s time.
 
KMG Chemicals has a long-term earnings growth rate of 28.5%. Its shares have been up 40% in the past year.
 
Ashland Global has a long-term earnings growth rate of 10%. The company’s shares have gained 40% over the past year.
 
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