My sentiments exactly. You would have thought they would have done everything possible to produce as much as possible during these times of record gold prices. Yet they continue to miss their, albeit aggressive, targets.
Earnings should still be great but I'm not sure how much credit they will get for that as they keep under-producing. If you do a quick and dirty extrapolation from Q2 earnings using Q3 operating margins and sales you get $0.18(Q2 earnings) * ($806/$708) * (41,390/40,257) = $0.21 earnings/share, where $806/$708 are the respective operating margins for Q3 and Q2 and 41,390/40,257 are the respective ounces sold.
The stock will initially get punished for the production miss, but if management wants to get the stock moving in the right direction, all they need to do is bite the bullet and provide realistic production numbers for 2012. I think the revised guidance of 155,000-163,000 for the whole year is a step in that direction but they have lost confidence from the market after stating in Q1 and Q2 conference calls they they still believed they could meet their guidance of at least 195,000 ounces, only to revise it down in OCTOBER by ~20%.
The fact of the matter is though, with gold prices where they are, these guys should be able to maintain a healthy ($600+) operating margin on production. You combine that even with 150,000 annual production numbers and you get an operating margin of $90M+ minimum, which I think still makes this company attractive to around $7/share, or ~6.5x operating margins.