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Kirkland Lake (KL) Gold's Earnings & Sales Top Estimates in Q2

Zacks Equity Research

Kirkland Lake Gold Ltd. KL reported net earnings of $150.2 million or 54 cents per share in second-quarter 2020, up from $104.2 million or 49 cents in the year-ago quarter.

Barring one-time items, adjusted earnings per share were 79 cents that beat the Zacks Consensus Estimate of 74 cents.

The company recorded revenues of $581 million, up 106.6% year over year. The figure also surpassed the Zacks Consensus Estimate of $566.1 million.

The company’s second-quarter results reflect strong growth in production and cash flow despite disruptions caused by the coronavirus pandemic.

Kirkland Lake Gold Ltd. Price, Consensus and EPS Surprise

Kirkland Lake Gold Ltd. Price, Consensus and EPS Surprise
Kirkland Lake Gold Ltd. Price, Consensus and EPS Surprise

Kirkland Lake Gold Ltd. price-consensus-eps-surprise-chart | Kirkland Lake Gold Ltd. Quote

Operational Highlights

Total gold production was 329,770 ounces in the second quarter, up around 54% year over year. Average realized price of gold was $1,716 per ounce, up 30% year over year.

Operating cash costs per ounce for gold rose 19.9% year over year to $374. All-in sustaining costs (AISC) for gold rose 17.7% year over year to $751 per ounce in the quarter.

Financial Position

At the end of the second quarter, Kirkland Lake Gold had cash and cash equivalents of $537.4 million, up 14.6% year over year. As of Jun 30, 2020, the company had no debt.

Net cash provided by operating activities rose 23.6% year over year to $222.2 million in the quarter.

Guidance

The company re-issued its 2020 guidance considering the progress achieved in ramping up business activities after the impact of the pandemic.  
For 2020, total gold production is expected to be between 1,350,000 ounces and 1,400,000 ounces. AISC for gold is expected in the range $790-$810 per ounce. Operating cash costs per ounce for gold is projected at $410-$430.

Price Performance

The stock has gained 15.6% in the past year compared with the industry’s 57.4% rally.

Zacks Rank & Key Picks

Kirkland Lake Gold currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space include Equinox Gold Corp. EQX, Gold Fields Limited GFI and Northern Dynasty Minerals Ltd. NAK, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Equinox Gold has an expected earnings growth rate of 255.2% for 2020. The company’s shares have surged 103% in the past year.

Gold Fields has an expected earnings growth rate of 35.7% for 2020. Its shares have returned 121.1% in the past year.

Northern Dynasty has an expected earnings growth rate of 35.7% for 2020. The company’s shares have gained 88.2% in the past year.

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