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A month has gone by since the last earnings report for Kinross Gold (KGC). Shares have lost about 17.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Kinross Gold due for a breakout? 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.
Kinross' Q3 Earnings Beat Estimates, Revenues Up Y/Y
Kinross logged profits of $240.7 million or 19 cents per share in third-quarter 2020, up from $60.9 million or 5 cents reported in the year-ago quarter. Barring one-time items, adjusted earnings came in at 25 cents per share that beat the Zacks Consensus Estimate of 21 cents.
Revenues rose 29% year over year to $1,131.3 million, partly supported by higher average realized gold prices.
Attributable gold equivalent ounces produced in the reported quarter totaled 603,312 ounces, down 0.8% year over year. The downside was mainly due to lower production at Paracatu, Maricunga and Kupol, which was largely offset by increases at Bald Mountain and Fort Knox.
Average realized gold prices were $1,908 per ounce in the quarter, up 30% from the year-ago quarter figure.
Production cost of sales per gold equivalent ounce was $737 in the quarter compared with $735 in the prior-year quarter. All-in sustaining cost per gold equivalent ounce sold fell 6.8% year over year to $958.
Margin per gold equivalent ounce sold was $1,171 in the quarter, up 60% year over year.
Adjusted operating cash flow jumped 86% year over year in the third quarter to $549.6 million. Cash and cash equivalents were $933.5 million as of Sep 30, up 160.8% year over year.
Long-term debt was $1,423.1 million at the end of the reported quarter, down 22.5% year over year.
For 2020, Kinross expects to produce around 2.4 million gold equivalent ounces at production cost of sales of $720 per gold equivalent ounce.
All-in sustaining cost per ounce for 2020 is projected at $970 and capital expenditure target for this year is $900 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -9.8% due to these changes.
Currently, Kinross Gold has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% 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.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Kinross Gold has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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