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Goldcorp's (GG) Q1 Earnings and Revenues Miss Estimates

Goldcorp Inc.GG reported net earnings of $67 million or 8 cents per share for first-quarter 2018, down from $170 million or 20 cents recorded a year ago. Earnings per share missed the Zacks Consensus Estimate of 11 cents.

Goldcorp recorded revenues of $846 million in the first quarter, down roughly 4.1% year over year. The figure also missed the Zacks Consensus Estimate of $868.5 million.

Gold sales went down around 9.4% year over year to 585,000 ounces and production fell 9.9% to 590,000 ounces.

All-in sustaining costs (AISC) were $810 per gold ounce, up roughly 1.3% year over year.

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 98,000 ounces, marking a decrease of 28.5% year over year from 137,000 ounces. AISC was $132 per ounce, down 66.2% from $391 in the year-ago quarter.

At the Cerro Negro in Argentina, gold production went up 24.2% to 118,000 ounces. AISC was $600 per ounce compared with $651 recorded in the year-ago quarter.

At the Pueblo Viejo mine, gold production was 94,000 ounces, down from 95,000 ounces a year ago. AISC was $591 per ounce compared with $541 in the year-ago quarter.

Financial Position

Goldcorp's cash and cash equivalents fell 27.2% year over year to $123 million. At the end of first quarter, the company had net debt and adjusted net debt of $2.3 billion and $2.1 billion, respectively.

The company recorded operating cash flow of $271 million for the first quarter compared with $227 million a year ago.

Outlook

Goldcorp expects gold production of 2.5 million ounces (+/- 5%) for 2018, unchanged from prior guidance. AISC has been projected to be roughly $800 per ounce (+/- 5%), also consistent with prior forecast.

Goldcorp stated that its program to achieve $250 million of sustainable annual efficiencies by the middle of this year remains on track. Goldcorp further expects cost reductions at Red Lake and productivity improvements at Cerro Negro to successfully extend the program beyond $250 million of annual sustainable efficiencies in the second half of this year. The company has achieved $210 million at the end of the first quarter.

Goldcorp expects sustaining capital expenditure to be $550 million for 2018.

Price Performance

Goldcorp's shares have lost 4% in the last three months, outperforming the 5.9% decline recorded by its industry .

Zacks Rank & Stocks to Consider

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

Better-ranked stocks in the basic materials space include Steel Dynamics, Inc. STLD , United States Steel Corporation X and Kronos Worldwide Inc. KRO , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have soared 23.9% over a year.

U.S. Steel has an expected long-term earnings growth rate of 8%. Its shares have rallied 47.6% over a year.

Kronos has an expected long-term earnings growth rate of 5%. Its shares have surged 30.5% over a year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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