It has been about a month since the last earnings report for Kirkland Lake Gold (KL). Shares have lost about 8.3% 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 Earnings and Sales Top Estimates in Q3
Kirkland Lake Gold reported net earnings of $254.9 million or 96 cents per share in third-quarter 2021 compared with $202 million or 73 cents in the year-ago quarter.
Barring one-time items, adjusted earnings per share were 91 cents that topped the Zacks Consensus Estimate of 81 cents.
The company recorded revenues of $667 million, up 5.4% year over year. The figure surpassed the Zacks Consensus Estimate of $619.2.
Operational Highlights
Total gold production was 370,101 ounces in the quarter, up 9% year over year. Average realized price of gold was $1,791 per ounce, down 6.1% year over year.
Operating cash costs per ounce for gold rose 7.8% year over year to $438. All-in sustaining costs (AISC) for gold fell 16% year over year to $740 per ounce in the quarter.
Financial Position
At the end of the third quarter, Kirkland Lake Gold had cash and cash equivalents of $822.4 million compared with $858.4 million as of Jun 30, 2021.
Net cash provided by operating activities declined 25% year over year to $323 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 an upward trend in estimates revision.
VGM Scores
Currently, Kirkland Lake Gold has a nice Growth Score of B, a grade with the same score on the momentum front. 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 A. 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, 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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