What's in Store for Kirkland Lake Gold's (KL) Q2 Earnings?

Kirkland Lake Gold Ltd. KL is set to release second-quarter 2020 results on Jul 30, before the opening bell.

The company has a trailing four-quarter negative earnings surprise of 0.8%, on average. The company’s second-quarter results are likely to reflect the benefits from higher production at Fosterville and Detour Lake Mine as well as increased gold prices.

The stock has gained 10.2% in the past year compared with the industry’s 58.8% rally.

Let’s see how things are shaping up for this announcement.

What to Expect in Q2

Earlier this month, the company released production figures for second-quarter 2020.

Total gold production for the second quarter rose 54% year over year to 329,770 ounces. Total gold poured in the second quarter was 338,573 ounces. Total gold sales surged 61% year over year to 341,390 ounces. Average realized price of gold increased 30% year over year to $1,716 per ounce.

Fosterville continued to demonstrate strong performance with production increasing 10% year over year to 155,106 ounces. Production at Macassa fell 14.9% year over year to 41,865 ounces in the second quarter. Production at Holt Complex was affected by temporary suspension effective Apr 2. Production in the second quarter totaled 807 ounces compared with 24,696 ounces in the prior-year quarter. Production at the Detour Lake Mine totaled 131,992 ounces despite disruptions caused by the pandemic.

Other Factors to Consider

Gold has been the bright spot this year as fears over the coronavirus pandemic made it the most attractive safe-haven asset. Gold prices gained around 13% in the second quarter — the highest quarterly percentage increase in more than four years.

Global uncertainty along with the coronavirus pandemic, renewed U.S.-China trade tensions and the civil unrest in the United States are contributing to the rally. As such, Kirkland Lake Gold’s second-quarter results are expected to reflect the benefits from higher gold prices. 

Q2 Estimates

The Zacks Consensus Estimate for second-quarter total revenues is currently pegged at $566 million, which calls for 101.4% surge on a year-over-year basis.

Kirkland Lake Gold Ltd. Price and EPS Surprise

Kirkland Lake Gold Ltd. Price and EPS Surprise

Kirkland Lake Gold Ltd. price-eps-surprise | Kirkland Lake Gold Ltd. Quote

What the Zacks Model Says

Our proven model doesn’t predict an earnings beat for Kirkland Lake Gold this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Kirkland Lake Gold is 0.00%. The Most Accurate Estimate and the Zacks Consensus Estimate are both currently pegged at 74 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Kirkland Lake Gold currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are some companies that you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Barrick Gold Corporation GOLD, scheduled to release second-quarter 2020 earnings on Aug 10, has an Earnings ESP of +0.54% and carries a Zacks Rank #3.

FMC Corporation FMC, slated to release second-quarter 2020 earnings on Aug 4, has an Earnings ESP of +1.13% and a Zacks Rank #3.

Pan American Silver Corp. PAAS, scheduled to release second-quarter 2020 results on Aug 5, has an Earnings ESP of +23.81% and carries a Zacks Rank #3.

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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.

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