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B2Gold (BTG) Down 7.7% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for B2Gold (BTG - Free Report) . Shares have lost about 7.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is B2Gold due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

B2Gold's Q4 Earnings Miss, Revenues Beat Estimates

B2Gold reported adjusted net income of $14 million or a penny per share in fourth-quarter 2018 compared with $6 million or a penny per share recorded a year ago. Earnings per share missed the Zacks Consensus Estimate of 2 cents.

Including one-time items, the company recorded a loss of $50 million or 6 cents per share compared with net income of $34 million or 3 cents per share in the prior-year quarter.

The company recorded revenues of $272 million in the fourth quarter, up 56.3% from the year-ago period. The figure beat the Zacks Consensus Estimate of $271 million.

 

Operational Update

B2Gold’s consolidated gold production was 231,687 ounces in the reported quarter, a year-over-year decline of 3.7%. Production for the quarter modestly exceeded the company’s reforecast production and was in line with budget.

The Fekola Mine produced 105,280 ounces of gold in the reported quarter, exceeding original budget.

The company reported consolidated cash operating costs of $523 per ounce in the fourth quarter, reflecting a year-over-year increase of 10.5%. Consolidated all-in sustaining costs (AISC) of $814 per ounce came in 8% higher than the year-ago quarter.

Financial Position

B2Gold’s cash and cash equivalents were $103 million at the end of 2018 compared with $147 million as of Dec 31, 2017. The company recorded operating cash flow of $74 million for the fourth quarter compared with $26 million reported in the year-earlier quarter.

The company repaid its $259-million aggregate principal amount of convertible senior subordinated notes on Oct 1, 2018. At the end of 2018, the company’s outstanding total debt had reduced to around $480 million from $700 million at the beginning of the year.

2018 Results

B2Gold reported adjusted net income of $162 million or 16 cents per share in 2018 compared to the prior year’s $52 million or 5 cents. Earnings marginally missed the Zacks Consensus Estimate of 17 cents. Including one-time items, the company recorded net income of $45 million or 3 cents per share compared with prior year’s net income of $62 million or 6 cents.

The company generated revenues of $1.22 billion in 2018, up a whopping 92% year over year. However, the top-line missed the Zacks Consensus Estimate of $1.24 billion.

In 2018, the company recorded annual consolidated gold production of 953,504 ounces, which is near the higher end of the revised guided range of 920,000-960,000 ounces. Production was up 51% year over year.

Outlook

For 2019, the Masbate Mine is expected to produce between 200,000 and 210,000 ounces of gold, up from the previous guidance of 180,000-190,000 ounces. Further, for the full year, Fekola's gold production is projected to be between 420,000 and 430,000 ounces (previous guidance was 400,000-410,000 ounces).

Moreover, B2Gold expects to continue its strong operational and financial performance from existing mines in the current year. It envisions consolidated gold production of between 935,000 and 975,000 ounces for 2019. Cash operating costs are forecast in the range of $520-$560 per ounce and AISC is predicted in the band of $835-$875 per ounce for 2019.

The company also hopes to generate $370 million cash flow from operations in 2019. It will focus on growth through the expansion of mines, as well as exploration and development of the existing projects while reducing debt levels.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, B2Gold has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

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

Outlook

B2Gold has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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