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Goldcorp (GG) Lags Q3 Earnings & Sales Estimates, Lowers View

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Goldcorp (GG) Lags Q3 Earnings & Sales Estimates, Lowers View

Higher costs and lower production dent Goldcorp's (GG) Q3 results. Also, the company lowered production guidance for 2018.

Goldcorp Inc. GG recorded net loss of $101 million or 12 cents per share in third-quarter 2018, against net earnings of $111 million or 13 cents in the prior-year quarter.

Barring one-time items, adjusted loss came in at 8 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 2 cents.

Goldcorp recorded revenues of $621 million in the quarter, down roughly 28.3% year over year. The figure also missed the Zacks Consensus Estimate of $714.5 million.

Gold sales fell around 19.3% year over year to 508,000 ounces, while production declined 20.5% to 503,000 ounces.

All-in sustaining costs (AISC) were $999 per gold ounce, up roughly 20.8% year over year.

Goldcorp Inc. Price, Consensus and EPS Surprise

 

Goldcorp Inc. Price, Consensus and EPS Surprise | Goldcorp Inc. Quote

 

Mining Highlights

At the Penasquito mine, gold production was 38,000 ounces, down from 133,000 ounces in the year-ago quarter. AISC rose to $1,968 per ounce from $288 recorded in the year-ago quarter.

At the Cerro Negro in Argentina, gold production fell 16.5% to 96,000 ounces. AISC was $520 per ounce compared with $712 in the year-ago quarter.

At the Pueblo Viejo mine, gold production was 101,000 ounces, flat year over year. AISC was $738 per ounce compared with $612 in the year-ago quarter.

Financial Position

Goldcorp’s cash and cash equivalents fell 19.4% year over year to $125 million. At the end of the quarter, the company had net debt and adjusted net debt of $2.6 billion and $2.4 billion, respectively.

The company recorded operating cash flow of $193 million in the quarter.

Outlook

Goldcorp lowered total gold production view for 2018. It now expects to produce 2.28 million ounces, down from roughly 2.5 million ounces expected earlier. AISC is now projected at roughly $850 per ounce, up from the previous forecast of $800 per ounce.

The company anticipates to produce roughly 620,000 ounces of gold at AISC of around $750 per ounce in the fourth quarter.

The company further stated that it has identified additional sustainable annual efficiencies worth $30 million, bringing it closer to its goal of attaining $350 million by the end of 2019.  

Price Performance

Goldcorp’s shares have lost 29.5% in the past three months compared with the 11.6% decline of the industry. The company’s shares took a hit due to disappointing third-quarter results.

 



 

Zacks Rank & Stocks to Consider

Goldcorp currently carries a Zacks Rank #5 (Strong Sell).

A few better-ranked stocks in the basic materials space are Methanex Corporation MEOH, KMG Chemicals, Inc. KMG and CF Industries Holdings, Inc. CF, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Methanex has expected long-term earnings growth rate of 15%. Its shares have rallied 31.2% in the past year.

KMG Chemicals has expected long-term earnings growth rate of 28.5%. Its shares have rallied 37.7% in the past year.

CF Industries has expected long-term earnings growth rate of 6%. Its shares have gained 18.8% in a year.

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