Goldcorp (GG) Q2 Earnings Beat, Revenues Miss Estimates
Goldcorp Inc. GG reported net earnings of $135 million or 16 cents per share for second-quarter 2017, against a net loss of $78 million or 9 cents per share a year ago.
Barring one-time items, adjusted earnings for the quarter was 12 cents per share. The figure beat the Zacks Consensus Estimate of 10 cents.
Goldcorp recorded revenues of $822 million in the reported quarter, missing the Zacks Consensus Estimate of $863 million.
Gold sales went up around 5.3% year over year to 649,000 ounces in the reported quarter and production rose 3.6% to 635,000 ounces.
All-in sustaining costs (AISC) were $800 per gold ounce (down roughly 25% 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 123,000 ounces, marking an increase of 241.7% year over year. AISC was $328 per ounce compared with $3,094 in the year-ago quarter.
At the Cerro Negro in Argentina, gold production was 112,000 ounces, marking an increase of 30.2% year over year. AISC was $694 per ounce compared with $808 in the year-ago quarter.
At the Pueblo Viejo mine, gold production was 115,000 ounces, marking an increase of 15% year over year. AISC was $440 per ounce compared with $587 in the year-ago quarter.
Financial Position
As of Jun 30, 2017, Goldcorp had total liquidity of $3 billion, including $0.1 billion in short-term investments and cash and cash equivalents and $2.9 billion credit facility. The company recorded adjusted operating cash flows of $320 million for the second quarter, an increase of 56.9% year over year.
Outlook
According to Goldcorp, its portfolio optimization strategies are continuing to drive net asset value per share. The company aims to achieve a 20% increase in gold reserves, 20% surge in gold production and 20% reduction in AISC over the next five years.
Goldcorp expects gold production of 2.5 million ounces (+/- 5%) for 2017. The company has revised its outlook for AISC in 2017 to reflect the progress it has made on initiative to realize sustainable annual efficiencies of $250 million by mid-2018. AISC for 2017 has been projected at $825 per ounce (+/- 5%), down from $850 per ounce expected earlier.
Price Performance
Goldcorp has lost 4.4% in last three months versus the 5.1% gain of its industry.
Zacks Rank & Key Picks
Goldcorp currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are The Sherwin-Williams Company SHW, Ternium S.A. TX and Hitachi Chemical Company, Ltd. HCHMY. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Sherwin-Williams has expected long-term earnings growth rate of 11.4%.
Ternium has expected long-term earnings growth rate of 18.4%.
Hitachi Chemical has expected long-term earnings growth rate of 5%.
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