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Kinross' (KGC) Q1 Earnings Beat Estimates, Sales Up Y/Y

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Kinross Gold Corporation (KGC - Free Report) logged a profit of $122.7 million or 10 cents per share in first-quarter 2020, up from $64.7 million or 5 cents in the year-ago quarter. Results benefited mainly from higher margins, which were partly offset by higher income tax expense. The figure also topped the Zacks Consensus Estimate of 8 cents.

Revenues rose 11.9% year over year to $879.8 million, partly supported by higher average realized gold prices.

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 production was 567,327 ounces in the reported quarter, down 6.4% year over year. The downside was mainly due to lower production at Kupol, Paracatu and Chirano as well as the end of production at Maricunga, which were partly offset by higher production at Fort Knox.  

Average realized gold prices were $1,581 per ounce in the quarter, up 21% from the year-ago quarter’s figure.

Production cost of sales per gold equivalent ounce was $754 in the quarter, up 10.6% year over year. All-in sustaining cost per gold equivalent ounce sold rose 7.4% year over year to $993.

Margin per gold equivalent ounce sold was $827 in the quarter, up 33% year over year.

Financial Review

Adjusted operating cash flow jumped 81% year over year in the first quarter to $418.6 million. Cash and cash equivalents were $1,138.6 million at the end of the first quarter, up 179.8% year over year.

Long-term debt was $2,488 million at the end of the reported quarter, up 33% year over year. Notably, the company has no scheduled debt maturities until September 2021.

Outlook

Kinross has withdrawn its 2020 view in April although the coronavirus pandemic did not have any material impact on its operations during the first quarter. The company believes that this decision is prudent considering the significant impact of the pandemic on global economy, commercial activities, global health and further potential business disruptions.  

Nevertheless, favorable foreign exchange rates and fuel prices are likely to provide some support and partly offset the company’s incremental costs stemming from contingency measures.

Price Performance

Shares of Kinross have rallied 130.5% in the past year compared with the industry’s 86.3% growth.



Zacks Rank & Key Picks

Kinross currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Agnico Eagle Mines Limited (AEM - Free Report) , Newmont Corporation (NEM - Free Report) and Franco-Nevada Corporation (FNV - Free Report) , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Agnico Eagle has an expected earnings growth rate of 74.2% for 2020. The company’s shares have surged 60.1% in the past year.

Newmont has an expected earnings growth rate of 96.2% for 2020. Its shares have returned 113.2% in the past year.    

Franco-Nevada has an expected earnings growth rate of 22% for 2020. The company’s shares have surged 105.3% in the past year.

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