A month has gone by since the last earnings report for Kirkland Lake Gold (KL). Shares have lost about 10.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Kirkland Lake Gold due for a breakout? 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.
Kirkland Lake Gold’s Q2 Earnings Top Estimates, Sales Meet
Kirkland Lake Gold reported net earnings of $224.2 million or 91 cents per share in second-quarter 2021 compared with $150.2 million or 54 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 92 cents that topped the Zacks Consensus Estimate of 85 cents.
The company recorded revenues of $662.7 million, up 14% year over year. The figure was in-line with the Zacks Consensus Estimate.
Operational Highlights
Total gold production was 379,195 ounces in the quarter, up 15% year over year. Average realized price of gold was $1,814 per ounce, up 5.7% year over year.
Operating cash costs per ounce for gold rose 15.2% year over year to $431. AISC for gold increased 3.9% year over year to $780 per ounce in the quarter.
Financial Position
At the end of the second quarter 2021, Kirkland Lake Gold had cash and cash equivalents of $858.4 million compared with $792.2 million as of Mar 31, 2021.
Net cash provided by operating activities increased 49% year over year to $330.6 million in the quarter.
Guidance
For 2021, the company expects total gold production between 1,300,000 ounces and 1,400,000 ounces. AISC for gold is expected between $790 and $810 per ounce for 2021. Operating cash costs per ounce sold is projected in the range of $450-$475.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Kirkland Lake Gold 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 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 broadly trending downward for the stock, and the magnitude of this revision looks promising. Notably, Kirkland Lake Gold has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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