Goldcorp Earnings Break Pattern of Recent Misses

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Goldcorp Inc. (NYSE: GG) reported third-quarter 2013 earnings before markets opened Thursday morning. The gold miner posted adjusted earnings per share (EPS) of $0.23 on adjusted revenues of $1.2 billion. In the same period a year ago, the company reported EPS of $0.54 on revenues of $1.28 billion. Third-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.20 and $1.11 billion in revenues.

On GAAP basis, the company posted earnings of $5 million, compared with $495 million in the year-ago quarter. Adjusted earnings excludes the impacts of foreign currency translations and amendments to the company’s service level agreement at its Pueblo Viejo operations. However adjusted EPS does include a negative impact of $0.03 per share for non-cash stock-based compensation.

The company’s CEO, said:

[W]e remain on track to achieve our annual production and cost guidance. Most importantly, our focus on operational discipline and cost containment delivered positive results. Most of our mines saw meaningful reductions in costs compared to the previous quarter …

The company sold 652,100 ounces of gold on production of 637,000 ounces in the third quarter. Silver production fell from 8.5 million ounces in the third quarter of 2012 to 7.7 million ounces. On an all-in sustaining basis, gold production costs rose from $801 a year ago to $992 an ounce. The average realized gold price for the quarter was $1,339 an ounce, down from $1,685 an ounce in 2012.

The company said that gold production for the fiscal year would be in the range of 2.6 million to 2.7 million ounces at an all-in cash sustaining cost of $1,050 to $1,100 an ounce. The consensus estimates for the fourth quarter call for EPS of $0.23 on revenues of $1.29 billion. For the full year, the consensus estimate for EPS is $0.95 on revenues of $4.25 billion.

Higher production costs and lower selling prices remain the big issues for precious metals miners.

Goldcorp shares were up 2.7% in premarket trading this morning, at $26.29 in a 52-week range of $22.22 to $45.53. Thomson Reuters had a consensus analyst price target of around $33.30 before this report.

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