Goldcorp Inc. GG incurred net loss of $131 million or 15 cents per share in second-quarter 2018, against net earnings of $135 million or 16 cents in the prior-year quarter.
Barring one-time items, adjusted earnings came in at 5 cents per share, which missed the Zacks Consensus Estimate of 7 cents.
Goldcorp recorded revenues of $793 million in the quarter, down roughly 3.5% year over year. The figure also missed the Zacks Consensus Estimate of $871.5 million.
Gold sales fell around 13.4% year over year to 562,000 ounces, while production declined 10.1% to 571,000 ounces.
All-in sustaining costs (AISC) were $850 per gold ounce, down roughly 6.3% 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 73,000 ounces, down 40.7% year over year from 123,000 ounces. AISC was $490 per ounce, up 49.4% from $328 in the year-ago quarter.
At the Cerro Negro in Argentina, gold production rose 15.2% to 129,000 ounces. AISC was $526 per ounce compared with $694 in the year-ago quarter.
At the Pueblo Viejo mine, gold production was 82,000 ounces, down from 115,000 ounces a year ago. AISC was $623 per ounce compared with $440 in the year-ago quarter.
Financial Position
Goldcorp’s cash and cash equivalents rose 47.5% year over year to $118 million. At the end of the second quarter, the company had net debt and adjusted net debt of $2.4 billion and $2.3 billion, respectively.
The company recorded operating cash flow of $158 million in the quarter under review.
Outlook
Goldcorp continues to expect gold production of 2.5 million ounces (+/- 5%) for 2018, unchanged from the previous guidance. AISC is projected at roughly $800 per ounce (+/- 5%), in line with the prior forecast. Goldcorp stated that it successfully executed its program of sustainable annual efficiencies worth $250 million. It has raised the target by another $100 million.
Goldcorp continues to expect sustaining capital expenditure to be $550 million for 2018.
Price Performance
Goldcorp’s shares have lost 6.4% in the last three months compared with the 4.4% decline recorded by its industry.
Zacks Rank & Stocks to Consider
Goldcorp currently carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the basic materials space are KMG Chemicals, Inc KMG, Methanex Corporation MEOH and Celanese Corporation CE, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have returned 41.6% in a year.
Methanex has an expected long-term earnings growth rate of 15%. Its shares have rallied 54.1% in a year.
Celanese has an expected long-term earnings growth rate of 10%. Its shares have gained 20.3% in a year.
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