Expectations are about 1c on earnings in May. If gold continues to hold mid 1300s, I see them averaging about $20 more per ounce than Q4. That will help by 1.5c. If costs hold the same I would expect 6-7c per share in Q1. That would be signifigant beat...
My calculation comes in about a penny higher than yours. Adjust my numbers if they are off: AISCC = 1150 = $150/Oz profit (@ 1300 average for Q) x 200, 000 oz's = $30M/376M shares = 08 cents/share. This would be a beat but it will still get pushed down so WS can buy some cheap shares (on the basis that annualized it's not that great and completely dismissing the expectation that production will ramp up in 2nd half of year).
Gives longer term investors more time to buy more cheap shares IMO!
Analysts have been moving estimates of profitability down in recent months as they assumed gold would continue to slide as it did last year and subsequently had been downgrading IAG. The current average analyst's estimate for the year is $0.14/share. Most of these estimates were likely made when gold was less than $1,300/oz. and on the downward trend.
With gold currently headed higher, based upon a price of $1,350/oz. and using IAG's guidance, I get earnings at $0.38/share for this gold price, so IAG is trading at a P/E of 10x forward earnings, very cheap. As the sector normally trades at a P/E of 15x, IAG is currently undervalued by 50% in my estimation right now. As gold heads higher as I think it will, this undervaluation will become more extreme. Eventually, analysts will start to upgrade IAG and the stock will head much higher as markets always correct themselves.
The market is giving us a gift by selling IAG at these levels. Buy it while you can.
Just as a point of reference, IAG earned 15 cents per share in Q1 2013 on 188,000 ounces of production with average price of gold at $1631/ounce for the quarter.
Insane that with gold over $1600, this company could only generate a measly 15 cents/share. Shows how terrible a job Letwin has done. Q1 2014 will end with gold about $300/ounce lower vs last year, so my expectations aren't too high. Much will depend on how much they were able to cut costs. Additionally, I fear that production may very well be lower than 188k ounces. If I had to guess, I'd say 7-8c, but the stock is trading like another patented Letwin disappointment PR is forthcoming.
The problem is these banana republic countries. If they wanna control costs just buy off the government and make slavery legal. It would be both cheaper and effective than the useless strategy so far. Even if gold recovers in a jurisdiction where a single mine is a significant component of that country's GDP then the banana republic hikes royalties. Its a loser proposition to help a 3rd world nation unless u control their government.