It has been about a month since the last earnings report for Kinross Gold (KGC). Shares have lost about 2.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Kinross 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.
Kinross’ Earnings Top, Revenues Lag Estimates in Q4
Kinross logged a net loss of $2.7 million per share in fourth-quarter 2021 against a profit of $783.3 million or 62 cents reported in the year-ago quarter.
Barring one-time items, adjusted earnings came in at 8 cents per share that topped the Zacks Consensus Estimate of 6 cents.
Revenues declined 26.4% year over year to $879.5 million. The top line missed the Zacks Consensus Estimate of $917.1 million.
Operational Performance
Attributable gold equivalent ounces produced in the reported quarter totaled 487,621 ounces, down 21.9% year over year. The downside was mainly due to lower production at Tasiast and Round Mountain.
Average realized gold prices were $1,797 per ounce in the quarter, down 4.2% from the year-ago quarter’s figure.
The production cost of sales per gold equivalent ounce was $864 in the quarter, up from $682 in the prior-year quarter. All-in sustaining cost per gold equivalent ounce sold rose 29.5% year over year to $1,312.
Margin per gold equivalent ounce sold was $929 in the quarter, down from the prior-year quarter’s level of $1,190.
FY21 Results
Earnings (as reported) for full-year 2021 were 17 cents per share compared with earnings of $1.06 per share a year ago. Net sales declined 11.5% year over year to around $3,729.4 million.
Financial Review
Adjusted operating cash flow declined 32.5% year over year in the fourth quarter to $356 million. Cash and cash equivalents were $531.5 million as of Dec 31 compared with $1,210.9 million as of Dec 31, 2020.
Long-term debt was $1,589.9 million at the end of the year, up 11.6% from $1424.2 million as of Dec 31, 2020.
Outlook
For 2022, Kinross expects to produce 2.65 million (+/- 5%) gold equivalent ounces. It expects a production cost of sales of $830 per gold equivalent ounce.
All-in sustaining cost per ounce for 2022 is projected at $1,130. Capital expenditures are predicted at around $1,050 million (+/- 5%) for this year.
In 2023 and 2024, the company expects capital expenditures to be $1 billion, in-line with 2022 levels.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -36.77% due to these changes.
VGM Scores
At this time, Kinross Gold has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 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
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It’s no surprise Kinross Gold has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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