Why Is B2Gold (BTG) Up 3.6% Since Last Earnings Report?
It has been about a month since the last earnings report for B2Gold (BTG). Shares have added about 3.6% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.
B2Gold Earnings Miss Estimates in Q3, Increase Y/Y
B2Gold reported adjusted earnings per share (EPS) of 5 cents for third-quarter 2023, missing the Zacks Consensus Estimate of 7 cents. The company posted an adjusted EPS of 3 cents in the prior-year quarter.
Including one-time items, BTG reported a loss of 3 cents per share compared with the prior-year quarter’s loss of 2 cents.
B2Gold generated revenues of $478 million in third-quarter 2023 compared with the prior-year quarter’s $393 million. The top line surpassed the Zacks Consensus Estimate of $474 million. The upside resulted from a 12.2% increase in average realized gold prices and an 8.5% rise in gold ounces sold.
In the September-end quarter, B2Gold recorded a consolidated gold production of 225,052 ounces, up 5% year over year. The total gold production (including 17,786 ounces of attributable production from Calibre) in the quarter was 242,838 ounces.
The company reported total consolidated cash operating costs of $755 per ounce in the reported quarter, down 7.4% year over year. Total consolidated all-in sustaining costs (AISC) of $1,272 per ounce were 8.8% higher than the prior-year quarter’s levels.
During the July-September quarter, the cost of sales was $307 million, up 0.3% year over year. The gross profit improved 98.3% year over year to $170 million. The gross margin expanded to 35.7% in the reported quarter from the prior-year quarter’s 21.9%.
The operating income in the reported quarter was $27.5 million compared with the prior-year quarter’s $54.5 million. The operating margin declined to 5.8% from the year-ago quarter’s 13.9%.
Financial Position
B2Gold’s cash and cash equivalents were $310 million at the end of the third quarter compared with $652 million at the end of 2022. The company generated $110 million in cash from operating activities in the June-end quarter compared with $93 million in the year-ago quarter.
BTG’s long-term debt was $34 million at the end of the third quarter compared with $42 million at the end of 2022.
Outlook
B2Gold reaffirms the financial guidance for the current year. It expects the 2023 total gold production guidance between 1,000,000 and 1,080,000 ounces, which includes 60,000-70,000 attributable ounces from Calibre. Total consolidated cash operating costs are projected to be $670-$730 per ounce. Total consolidated AISC is anticipated to be $1,195-$1,255 per ounce.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 14.29% due to these changes.
VGM Scores
Currently, B2Gold has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% 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
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, B2Gold has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
B2Gold belongs to the Zacks Mining - Gold industry. Another stock from the same industry, Barrick Gold (GOLD), has gained 12.6% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Barrick Gold reported revenues of $2.86 billion in the last reported quarter, representing a year-over-year change of +13.3%. EPS of $0.24 for the same period compares with $0.13 a year ago.
Barrick Gold is expected to post earnings of $0.25 per share for the current quarter, representing a year-over-year change of +92.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.2%.
Barrick Gold has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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