It has been about a month since the last earnings report for Kinross Gold (KGC). Shares have added about 6.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Kinross Gold 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.
Kinross’ Earnings and Revenues Lag Estimates in Q1
Kinross logged profits of $149.5 million or 12 cents per share in first-quarter 2021, up from $122.7 million or 10 cents reported in the year-ago quarter.
Barring one-time items, adjusted earnings came in at 15 cents per share that missed the Zacks Consensus Estimate of 17 cents.
Revenues rose 12% year over year to $986.5 million. However, the top line missed the Zacks Consensus Estimate of $1069.9 million.
Attributable gold equivalent ounces produced in the reported quarter totaled 558,777 ounces, down 1.5% year over year. The downside was mainly due to lower production at Tasiast and Round Mountain. This was partly offset by higher production at Bald Mountain.
Average realized gold prices were $1,787 per ounce in the quarter, up 13% from the year-ago quarter’s figure.
Production cost of sales per gold equivalent ounce was $756 in the quarter, almost in-line with $754 in the prior-year quarter. All-in sustaining cost per gold equivalent ounce sold fell 1.8% year over year to $975.
Margin per gold equivalent ounce sold was $1,031 in the quarter, up 25% year over year.
Adjusted operating cash flow declined 4.5% year over year in the first quarter to $399.6 million due to increase in current tax expense, offset by higher operating earnings. Cash and cash equivalents were $1,056.1 million as of Mar 31, down 8.3% year over year.
Long-term debt was $1,425.5 million at the end of the first quarter, down 42.7% year over year.
For 2021, Kinross expects to produce 2.4 million (+/- 5%) gold equivalent ounces at production cost of sales of $790 per gold equivalent ounce.
All-in sustaining cost per ounce for 2021 is projected at $1,025. Capital expenditures are predicted at around $900 million (+/- 5%) for this year.
In 2022 and 2023, the company expects annual production to increase to around 2.7 and 2.9 million gold equivalent ounces, respectively. Kinross also anticipates production at an average 2.5 million gold equivalent ounces per year through the end of the decade.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -7.84% due to these changes.
Currently, Kinross Gold has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren’t focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Kinross 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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