It has been about a month since the last earnings report for Kinross Gold (KGC). Shares have added about 4.2% in that time frame, underperforming 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 catalysts.
Kinross’ Earnings Miss Estimates, Revenues Flat in Q1
Kinross logged a profit of $82.3 million or 6 cents per share in first-quarter 2022 compared with $76.2 million or 6 cents reported in the year-ago quarter. Earnings per share missed the Zacks Consensus Estimate of 8 cents.
Revenues remained flat year over year at $768 million.
Operational Performance
Attributable gold equivalent ounces produced in the reported quarter totaled 409,857 ounces, down 6.1% year over year. The downside was mainly due to lower production at Round Mountain and Paracatu, which more than offset higher production at Tasiast.
Average realized gold prices were $1,875 per ounce in the quarter, up 4.9% from the year-ago quarter’s figure.
The production cost of sales per gold equivalent ounce was $1,003, up from $803 in the prior-year quarter. AISC per gold equivalent ounce sold rose 18.4% year over year to $1,245.
Margin per gold equivalent ounce sold was $872 in the quarter, down from the prior quarter’s level of $984.
Financial Review
Adjusted operating cash flow declined 12.7% year over year in the first quarter to $261 million. Cash and cash equivalents were $454.2 million as of Mar 31, 2022, compared with $531.5 million as of Dec 31, 2021.
Long-term debt was $2,688.8 million at the end of the quarter, up 69.1% from $1,589.9 million as of Dec 31, 2021.
Outlook
For 2022, Kinross expects to produce 2.15 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 $1,150. Capital expenditures are predicted at around $850 million (+/- 5%) for this year, down from $1,050 million as expected earlier.
In 2023 and 2024, the company expects capital expenditures to be $750 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -11.11% due to these changes.
VGM Scores
Currently, Kinross Gold has a subpar Growth Score of D, though it is lagging a bit 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 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. 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. Notably, Kinross Gold 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
Kinross Gold is part of the Zacks Mining – Gold industry. Over the past month, Agnico Eagle Mines (AEM), a stock from the same industry, has gained 0.1%. The company reported its results for the quarter ended March 2022 more than a month ago.
Agnico reported revenues of $1.33 billion in the last reported quarter, representing a year-over-year change of +41.9%. EPS of $0.61 for the same period compares with $0.67 a year ago.
For the current quarter, Agnico is expected to post earnings of $0.54 per share, indicating a change of -20.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.1% over the last 30 days.
Agnico has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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