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Kinross' (KGC) Q1 Earnings Beat, Revenues Trail Estimates

Zacks Equity Research

Kinross Gold Corporation KGC delivered net earnings of $64.7 million or 5 cents per share in first-quarter 2019, down from $106.1 million or 8 cents in the year-ago quarter.

Barring one-time items, adjusted earnings per share (EPS) came in at 7 cents, which beat the Zacks Consensus Estimate of a penny.

Revenues from metal sales totaled $786.2 million, which declined 12.4% year over year. The downside was mainly caused by lower realized prices of gold and a decline in gold equivalent ounces sold. The figure missed the Zacks Consensus Estimate of $808.3 million.

Kinross Gold Corporation Price, Consensus and EPS Surprise

 

Kinross Gold Corporation Price, Consensus and EPS Surprise

Kinross Gold Corporation price-consensus-eps-surprise-chart | Kinross Gold Corporation Quote

 

Operational Performance

Attributable gold production was 606,031 ounces in the quarter, down 7.3% year over year.  

Production cost of sales per gold equivalent ounce rose 3.6% year over year to $682 in the quarter. All-in sustaining cost per gold equivalent ounce sold climbed 9.3% year over year to $925.

Margin per gold equivalent ounce sold was $622 in the first quarter, down 7.4% year over year.

Average realized gold prices was $1,304 per ounce, down roughly 2% year over year.

Financial Review

Adjusted operating cash flow in the first quarter was $230.8 million, down 36.5% year over year. Cash and cash equivalents were $406.9 million, down 59.2% year over year. As of Mar 31, 2019, the company had total liquidity of roughly $1.8 billion.

Long-term debt amounted to $1,870 million at the end of the first quarter. Notably, the company has no scheduled debt maturities due until 2021.

Capital expenditures rose 7.2% year over year to $264.8 million in the first quarter.

Outlook

Kinross provided production and cost guidance for 2019. The company expects gold production of 2.5 million (+/- 5%) gold equivalent ounces at production cost of sales of $730 (+/- 5%) per gold equivalent ounce. All-in sustaining cost is expected to be $995 (+/- 5%) per gold equivalent ounce.

Kinross anticipates capital expenditures of $1,050 million (+/- 5%) for 2019.

Price Performance

Shares of Kinross have lost 13.1% in the past year compared with the industry’s 0.9% decline.



Zacks Rank & Key Picks

Kinross currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Materion Corporation MTRN, Fortescue Metals Group Ltd. FSUGY and AngloGold Ashanti Limited AU, all currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Materion has an expected earnings growth rate of 16.4% for 2019. The company’s shares have gained 21.1% in the past year.

Fortescue Metals has an expected earnings growth rate of 101.5% for the current year. The company’s shares have surged 36.2% in a year’s time.

AngloGold has an expected earnings growth rate of 86.8% for 2019. Its shares have rallied 32.9% in a year’s time.

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