B2Gold (BTG) Down 4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for B2Gold (BTG). Shares have lost about 4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is B2Gold due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
B2Gold Earnings Miss Estimates in Q2, Increase Y/Y
B2Gold reported adjusted earnings per share (EPS) of 6 cents for second-quarter 2023, missing the Zacks Consensus Estimate of 7 cents. The company posted an adjusted EPS of 4 cents in the prior-year quarter.
Including one-time items, BTG reported 6 cents per share of earnings compared with the prior-year quarter’s 4 cents.
B2Gold generated revenues of $471 million in second-quarter 2022 compared with the prior-year quarter’s $382 million. The top line surpassed the Zacks Consensus Estimate of $431 million. The upside resulted from a 5.8% increase in average realized gold prices and a 16.5% increase in gold ounces sold.
During the June-end quarter, B2Gold recorded consolidated gold production of 245,961 ounces, up 17.8% year over year. The total gold production (including 16,740 ounces of attributable production from Calibre) in the quarter was 262,701 ounces.
The company reported total consolidated cash operating costs of $636 per ounce in the reported quarter, down 18.6% year over year. Total consolidated all-in sustaining costs (AISC) of $1,214 per ounce were 9.3% higher than the prior-year quarter’s levels.
During the April-June quarter, the cost of sales was $281 million, up 6.3% year over year. The gross profit improved 61% year over year to $190 million. The gross margin expanded to 40.3% in the reported quarter from the prior-year quarter’s 38.8%.
The operating income in the reported quarter was $159 million compared with the prior-year quarter’s $98 million. The operating margin declined to 33.8% from the year-ago quarter’s 26%.
Financial Position
B2Gold’s cash and cash equivalents were $506 million at the end of the second quarter compared with $587 million at the end of second-quarter 2022. The company generated $125 million in cash from operating activities in the June-end quarter compared with $125 million in the year-ago quarter.
The company’s long-term debt was $39 million at the end of the second quarter compared with $47 million at the end of 2022.
Outlook
B2Gold reaffirms the financial guidance for the current year. It expects the 2023 total gold production guidance between 1,000,000 and 1,080,000 ounces, which includes 60,000-70,000 attributable ounces from Calibre. Total consolidated cash operating costs are projected between $670 and $730 per ounce. Total consolidated AISC is anticipated between $1,195 and $1,255 per ounce.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 27.27% due to these changes.
VGM Scores
At this time, B2Gold has a strong Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile 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 looks promising. Notably, B2Gold has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
B2Gold belongs to the Zacks Mining - Gold industry. Another stock from the same industry, Agnico Eagle Mines (AEM), has gained 0.3% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.
Agnico reported revenues of $1.72 billion in the last reported quarter, representing a year-over-year change of +8.7%. EPS of $0.65 for the same period compares with $0.75 a year ago.
Agnico is expected to post earnings of $0.47 per share for the current quarter, representing a year-over-year change of -9.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.6%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Agnico. Also, the stock has a VGM Score of D.
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