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Goldcorp's (GG) Q4 Earnings Beat, Sales Trail Estimates

Zacks Equity Research

Goldcorp Inc. GG reported net loss of $3,984 million or $4.58 per share in fourth-quarter 2018, against net earnings of $242 million or 28 cents in the prior-year quarter.

Barring one-time items, adjusted earnings came in at 7 cents per share, which surpassed the Zacks Consensus Estimate of 2 cents.

Goldcorp recorded revenues of $772 million in the quarter, down roughly 9.5% year over year. The figure missed the consensus mark of $853.4 million.

Gold sales fell around 5.2% year over year to 600,000 ounces, while production declined 2.5% to 630,000 ounces.

All-in sustaining costs (AISC) were $765 per ounce for gold, down roughly 12.1% year over year.

2018 Highlights

The company incurred net loss of $4,149 million or $4.77 per share in 2018, against net income of $658 million or 76 cents a year ago.

Total revenues fell roughly 11.4% year over year to $3,032 million. Total gold production declined 10.7% to 2,294,000 ounces.

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 63,000 ounces in the fourth quarter, down from 83,000 ounces in the year-ago quarter. AISC fell to $513 per ounce from $571 recorded in the year-ago quarter.

At the Cerro Negro in Argentina, gold production rose 12.3% to 146,000 ounces. AISC was $488 per ounce compared with $672 in the year-ago quarter.

At the Pueblo Viejo mine, gold production was 111,000 ounces, down 9% year over year. AISC was $578 per ounce compared with $496 in the year-ago quarter.

Financial Position

As of Dec 31, 2018, Goldcorp had cash and cash equivalents of $134 million, down 28% year over year. At the end of the quarter, the company had net debt and adjusted net debt of $2.7 billion and $2.5 billion, respectively.

The company recorded adjusted operating cash flow of around $1 billion in 2018 compared with $1.3 billion in 2017.

Outlook

Goldcorp announced production and cost guidance for 2019. It expects to produce 2.2-2.4 million ounces of gold at AISC of $750-$850 per ounce. Cash costs per ounce is expected in the range of $400-$500.

The company projects sustaining capital in the range of $575-$625 million and expansionary capital of $290-$350 million.

Price Performance

Goldcorp’s shares have lost 21.6% in the past year compared with the industry’s 6.5% decline.



Zacks Rank & Stocks to Consider

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

A few better-ranked stocks in the basic materials space include Kirkland Lake Gold Ltd. KL, The Mosaic Company MOS and Silver Standard Resources Inc. SSRM. While Kirkland currently sports a Zacks Rank #1 (Strong Buy), Mosaic and Silver Standard Resources carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here .

Kirkland has an expected earnings growth rate of 20.9% for 2019. The company’s shares have surged 118.2% in the past year.

Mosaic has an expected earnings growth rate of 23.5% for 2019. Its shares have rallied 23.5% in a year’s time.

Silver Standard Resources has an expected earnings growth rate of 29.2% for 2019. Its shares have surged 55.8% in a year’s time.

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