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B2Gold (BTG) Up 3.3% Since Last Earnings Report: Can It Continue?

Zacks Equity Research

A month has gone by since the last earnings report for B2Gold (BTG). Shares have added about 3.3% 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 Q3 Earnings Beat Estimates, Revenues Up Y/Y

B2Gold Corp delivered third-quarter 2019 adjusted earnings per share of 9 cents, surpassing the Zacks Consensus Estimate of 7 cents. Also, the reported figure surged 125% year over year.

Including one-time items, the company reported earnings of 5 cents per share compared with 1 cent per share recorded in the prior-year quarter.
B2Gold generated revenues of $311 million in the third quarter, reflecting year-over-year growth of 11%. This upside resulted from increase in the average realized gold price, partly offset by decrease in the gold ounces sold.

Operational Update

B2Gold’s consolidated gold production was a record 258,200 ounces in the reported quarter, 7% above the company’s budget. This can be attributed to solid performances across all of the company's operations. On a year-over-year basis, gold production was up 7% in the quarter under review.
The company reported consolidated cash operating costs of $443 per ounce in the reported quarter, 10% below the budgeted level and flat with the year-ago quarter. Consolidated all-in sustaining costs (AISC) of $755 per ounce were slightly below budget by 1%. However, the figure rose 17.2% year over year.

Financial Position

B2Gold’s cash and cash equivalents were $146.4 million at the end of the third quarter of 2019 compared with $350.5 million recorded at the end of the year-ago quarter. The company recorded operating cash flow of $168 million for the third quarter compared with the $143 million reported in the prior-year quarter.

On Nov 5, 2019, B2Gold’s board announced its first quarterly dividend of 1 cent per share. The dividend is payable on Dec 13 to shareholders of record at the close of business on Nov 29, 2019. The company intends to maintain the payment of a quarterly dividend at the same level in the days ahead.
 
Outlook

Backed by strong gold production so far in 2019, B2Gold remains well positioned for continued robust operational and financial performance, and produce gold at the mid-point of the previous estimate of 935,000-975,000 ounces this year. Consolidated cash costs are projected to remain low in the current year, with cash operating costs forecast to be at or below the lower end of $520 and $560 per ounce guidance, while AISC is expected to be within the company’s guided range of $835 per ounce and $875 per ounce.

Recent Development

In October, B2Gold sold its El Limon and La Libertad Gold Mines and assets in Nicaragua to Calibre Mining, for an aggregate consideration of $100 million. The deal also includes the Pavon gold project and additional mineral concessions in Nicaragua. Post the deal, B2Gold holds 93,331,666 shares in Calibre, representing approximately 30.08% stake. Through its significant equity interest in Calibre, B2Gold will be involved in the Nicaraguan operations.
 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted -7.14% due to these changes.

VGM Scores

At this time, B2Gold has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

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

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision has been net zero. It comes with little surprise B2Gold has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.



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