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Kinross (KGC) Q2 Earnings Beat Estimates, Revenues Up Y/Y

Zacks Equity Research

Kinross Gold Corporation KGC logged a profit of $195.7 million or 15 cents per share in second-quarter 2020, up from $71.5 million or 6 cents per share reported in the year-ago quarter. Results benefited mainly from higher operating earnings and a non-cash impairment reversal of $48.3 million at Lobo-Marte, which were partly offset by higher income tax expenses. Earnings also beat the Zacks Consensus Estimate of 14 cents.

Revenues rose 20.2% year over year to $1,007.2 million, partly supported by higher average realized gold prices.

Operational Performance

Attributable gold production was 571,978 ounces in the reported quarter, down 11.8% year over year. The downside was mainly due to lower production at Round Mountain, Paracatu and Chirano, which was partly offset by higher production at Bald Mountain and Kupol.

Average realized gold prices were $1,712 per ounce in the quarter, up 31% from the year-ago quarter figure.

Production cost of sales per gold equivalent ounce was $725 in the quarter, up 9.3% year over year. All-in sustaining cost per gold equivalent ounce sold rose 6.4% year over year to $984.

Margin per gold equivalent ounce sold was $987 in the quarter, up 53% year over year.

Kinross Gold Corporation Price, Consensus and EPS Surprise

 

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

Financial Review

Adjusted operating cash flow jumped 45% year over year in the second quarter to $416.9 million. Cash and cash equivalents were $1,527.1 million at the end of the second quarter, up 221.2% year over year.

Long-term debt was $2,671.6 million at the end of the reported quarter, up 41.3% year over year. Notably, the company has no scheduled debt maturities until September 2021.

Outlook

Kinross, in April, withdrew its full-year guidance on account of the global uncertainties created by the coronavirus pandemic. The company believes that the decision is prudent, considering the significant impact of the pandemic on the global economy, commercial activities and global health, and further potential business disruptions.

Nevertheless, the company stated that it is on track to meet its original guidance of production, cost of sales per ounce, all-in sustaining cost per ounce and capital expenditure for 2020.

Price Performance

Shares of Kinross have rallied 96% in the past year compared with the industry’s 57.4% growth.

 

 

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Royal Gold, Inc. RGLD, Equinox Gold Corp. EQX and B2Gold Corp BTG.

Royal Goldhas a projected earnings growth rate of 62.1% for the current year. The company’s shares have gained 17.5 in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Equinox Gold has a projected earnings growth rate of 255.2% for the current year. The stock has gained around 102% in a year. It currently has a Zacks Rank of 2 (Buy).

B2Gold has an expected earnings growth rate of 257.1% for 2020. The company’s shares have rallied 100% in the past year.It is presently a Zacks #2 Ranked player.

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