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Why Is B2Gold (BTG) Up 18.8% Since Last Earnings Report?

A month has gone by since the last earnings report for B2Gold (BTG). Shares have added about 18.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is B2Gold due for a pullback? 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.

B2Gold  Misses Earnings Estimates in Q3, Down Y/Y

B2Gold reported adjusted earnings per share of 3 cents for third-quarter 2022, missing the Zacks Consensus Estimate of 5 cents. The company reported an adjusted EPS of 12 cents in the prior-year quarter.

Including one-time items, the company reported a loss of 2 cents per share compared with the prior-year quarter’s earnings of 12 cents per share.

B2Gold generated revenues of $393 million in the third quarter of 2022, down 23% from the prior-year quarter’s $511 million. The figure came in-line with the Zacks Consensus Estimate. The year over year downfall resulted from a 20% decrease in gold ounces sold, and a 4% drop in the average realized gold prices.

The company reported total consolidated cash operating costs of $824 per ounce in the reported quarter, up 71% year over year. Total consolidated all-in sustaining costs (AISC) of $1,169 per ounce were 47% higher than the prior-year quarter’s levels.

During the third quarter, the cost of sales was $307 million, up 11.2% year over year. The gross profit plunged 63.4% year over year to $86 million. The gross margin decreased to 21.9% in the reported quarter from the prior-year quarter’s 46%. The operating income in the reported quarter was $54.5 million compared with the prior-year quarter’s $218.5 million.

Financial Position

B2Gold’s cash and cash equivalents were $549 million at the end of the third quarter compared with $673 million at the end of 2021. The company generated $93 million cash from operating activities in the September-end quarter against $320 million in the year-ago quarter. The company’s long-term debt was $42.7 million at the end of the third quarter compared with $49.7 million at the end of 2021.

Outlook

B2Gold’s total consolidated production and cost guidance remain unchanged for the year 2022.  It is on track to achieve its current-year total consolidated gold production guidance between 990,000 ounces and 1,050,000 ounces. Total consolidated cash operating costs are projected to be at the upper end of the company’s guidance, between $620 per ounce and $660 per ounce. Total consolidated All-in sustaining cost (AISC) is anticipated to be between $1,010 and $1,050 per ounce.

How Have Estimates Been Moving Since Then?

Estimates review followed an upward path over the past two months.

The consensus estimate has shifted 11.54% due to these changes.

VGM Scores

Currently, B2Gold has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

B2Gold has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

B2Gold is part of the Zacks Mining - Gold industry. Over the past month, Agnico Eagle Mines (AEM), a stock from the same industry, has gained 19.1%. The company reported its results for the quarter ended September 2022 more than a month ago.

Agnico reported revenues of $1.45 billion in the last reported quarter, representing a year-over-year change of +48.8%. EPS of $0.52 for the same period compares with $0.60 a year ago.

For the current quarter, Agnico is expected to post earnings of $0.40 per share, indicating a change of -13% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.3% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Agnico. Also, the stock has a VGM Score of C.

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