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Why Is B2Gold (BTG) Up 9.2% Since Last Earnings Report?

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A month has gone by since the last earnings report for B2Gold (BTG - Free Report) . Shares have added about 9.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is B2Gold due for a pullback? Before we dive into how investors and analysts have reacted as 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.

B2Gold's Q1 Earnings In line, Revenues Beat Estimates

B2Gold reported first-quarter 2019 adjusted earnings per share of 4 cents, in line with the Zacks Consensus Estimate. The top line plunged 33% on a year-over-year basis.
Including one-time items, the company reported earnings per share of 2 cents per share compared with 4 cents per share in the prior-year quarter.
 
The company recorded revenues of $302 million in the first quarter of 2019, up 56.3% from the year-ago period. The figure beat the Zacks Consensus Estimate of $300 million.

Operational Update

B2Gold’s consolidated gold production was 230,859 ounces in the reported quarter, 6% above the company’s budget. Gold production from the Fekola, Masbate, Otjikoto and El Limon mines came in ahead of their targeted production. On a year-over-year basis, gold production declined 4% in the quarter under review.
 
The company reported consolidated cash operating costs of $545 per ounce in the first quarter, 5% below the budgeted level. Compared with the prior-year quarter’s cash operating cost of $481 per ounce, the figure exhibited an improvement of 13%. Consolidated all-in sustaining costs (AISC) of $848 per ounce were significantly below budget by 14%. However, the figure rose 13% higher year over year.

Financial Position

B2Gold’s cash and cash equivalents were $141.6 million at the end of the first quarter of 2019 compared with $102.7 million as of Dec 31, 2018. The company recorded operating cash flow of $86.4 million for the first quarter compared with $147 million reported in the prior-year quarter.

Outlook

For 2019, the Masbate Mine is expected to produce between 200,000 and 210,000 ounces of gold. Further, for the full year, Fekola's gold production is projected to be between 420,000 and 430,000 ounces. The Otjikoto Mine is expected to produce between 165,000 and 175,000 ounces of gold. The Libertad Mine is expected to produce between 95,000 and 100,000 ounces of gold and the El Limon is anticipated to produce between 55,000 and 60,000 ounces of gold.

Moreover, B2Gold expects to continue 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 around $400 million of cash from operations in 2019, based on a gold price assumption of $1,300 per ounce. 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

Currently, B2Gold has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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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