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Royal Gold (RGLD) Earnings Beat Estimates in Q3, Up Y/Y

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·4 min read
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Royal Gold, Inc. RGLD reported adjusted earnings per share of 84 cents in third-quarter fiscal 2021 (ended Mar 31, 2021), beating the Zacks Consensus Estimate of 81 cents. The bottom line also improved 23.5%, year over year, aided by outstanding performance of the company’s operating portfolio and continued robust metal prices.

Including one-time items, the company reported earnings per share of 82 cents compared with the prior-year quarter’s 59 cents.

The company generated revenues of $143 million, reflecting year-over-year growth of 5%. Stream revenues were down 2.2% year over year to $95.3 million, while royalty revenues climbed 20.5% to $47.3 million year over year. Gains from higher gold, silver and copper prices, and an increase in gold production at Penasquito mine drove revenues in the quarter. The top-line figure, however, missed the Zacks Consensus Estimate of $149.7 million.

The company’s cost of sales came in at $21.4 million in the fiscal third quarter, flat year over year.

General and administrative expenses amounted to $7 million, down 27.3% year on year. Adjusted EBITDA was $114 million in the reported quarter and adjusted EBITDA margin was 79.7%.

Royal Gold, Inc. Price, Consensus and EPS Surprise

Royal Gold, Inc. Price, Consensus and EPS Surprise
Royal Gold, Inc. Price, Consensus and EPS Surprise

Royal Gold, Inc. price-consensus-eps-surprise-chart | Royal Gold, Inc. Quote

Financial Position

Net cash from operating activities was $92.2 million in the fiscal third quarter compared with the prior-year quarter’s $99.6 million. Royal Gold ended the reported quarter with $370 million cash in hand, up from the $319 million held at the end of fiscal 2020.Royal Gold is now debt free after it repaid $150-million outstanding balance on revolving credit facility in April. The company has now available credit facility of $1 billion.

Other Updates

Management stated that the Khoemacau Project (Khoemacau) reached approximately 92% of construction completion as of Mar 31, 2021. On Jan 6, Royal Gold made the sixth advance payment of $32.6 million. This brings the total contribution to $212 million and completes the advance payment required to earn the full base silver stream. A seventh advance payment of $10.6 million made on Apr 7, suggesting Royal Gold’s right to purchase 84% of silver stream.

Outlook

For fourth-quarter fiscal 2021, Royal Gold expects stream segment sales between 60,000 and 65,000 GEOs (Gold Equivalent Ounces). Inventory at the end of the quarter is projected to range between 31,000 and 36,000 GEOs.

For fiscal 2021, depreciation, depletion and amortization expense is estimated to be $540-$590 per GEO, and the effective tax rate is expected to to lie between 19% and 23%.

Price Performance

Over the past three months, shares of Royal Gold have gained 5.7% as against the the industry’s decline of 0.5%.



Zacks Rank & Stocks to Consider

Royal Gold currently carries a Zacks Rank #5 (Strong Sell).

Better-ranked stocks in the basic materials space include ArcelorMittal MT, Celanese Corp. CE and Dow Inc. DOW. All of these stocks flaunt a Zacks Rank #1 (Strong Buy) currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

ArcelorMittal has a projected earnings growth rate of 984.7% for the current fiscal year. The company’s shares have soared nearly 179% in the past year.

Celanese has an expected earnings growth rate of 68.3% for the current fiscal year. The company’s shares have rallied around 90% over the past year.

Dow has a projected earnings growth rate of 261.6% for the current fiscal year. The company’s shares have gained roughly 75% in a year’s time.

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