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Goldcorp's (GG) Q3 Earnings In Line, Revenues Miss Estimates

Goldcorp Inc. GG reported net earnings of $111 million or 13 cents per share for third-quarter 2017, compared with $59 million or 7 cents recorded a year ago.

Barring one-time items, adjusted earnings for the quarter was 9 cents per share, which was in line with the Zacks Consensus Estimate.

Goldcorp recorded revenues of $866 million in the reported quarter, narrowly missing the Zacks Consensus Estimate of $868 million.

Gold sales went down around 11.7% year over year to 606,000 ounces in the reported quarter and production fell 11.5% to 633,000 ounces.

AISC were $827 per gold ounce (up roughly 1.8% year over year).

According to Goldcorp, the company was able to achieve its target gold production at low costs, led by robust operating performance at Cerro Negro and Penasquito. The company’s portfolio optimization is now complete and it has a strong pipeline of developmental projects that are poised to deliver value growth.

Goldcorp Inc. Price, Consensus and EPS Surprise

 

Goldcorp Inc. Price, Consensus and EPS Surprise | Goldcorp Inc. Quote

Mining Highlights

At the Penasquito mine, gold production was 133,000 ounces, marking an increase of 9.9% year over year. AISC was $288 per ounce, down 62.9% year over year from $777 in the year-ago quarter.

At the Cerro Negro in Argentina, gold production was 115,000 ounces, marking an increase of 19.8% year over year. AISC was $712 per ounce up 9.4% year over year from $651 recorded in the year-ago quarter.

At the Pueblo Viejo mine, gold production was 101,000 ounces, marking a decrease of 19.8% year over year. AISC was $612 per ounce compared with $454 in the year-ago quarter.

Financial Position

As of Sep 30, Goldcorp had total liquidity of $3.1 billion, including $0.2 billion in short-term investments and cash and cash equivalents and $2.9 billion available on its $3 billion credit facility. The company had adjusted net debt of $2.2 billion as on Sep 30.

The company recorded adjusted operating cash flows of $308 million for the third quarter, a decrease of 23.2% year over year.

Outlook

Goldcorp expects gold production of 2.5 million ounces (+/- 5%) for 2017, unchanged from previous guidance. AISC for 2017 has been projected at $825 per ounce (+/- 5%), down from $850 per ounce expected earlier.

Goldcorp has reduced sustaining capital expenditure guidance by $100 million to $600 million for 2017 due to the company’s focus on capital management discipline as a part of its $250 million annual sustainable efficiency program.  

Price Performance

Goldcorp’s shares have declined 1.6% in the last three months outperforming the 2.5% fall recorded by its industry.

 


 

Zacks Rank & Key Picks

Goldcorp currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Cabot Corporation CBT, FMC Corporation FMC and Westlake Chemical Corporation WLK. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Cabot has an expected long-term earnings growth rate of 10.7%.

FMC has an expected long-term earnings growth rate of 11.3%.

Westlake Chemical has an expected long-term earnings growth rate of 8.3%.

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