Kinross Gold Corp. (KGC, Financial) tumbled 6.8% to $3.98 per share after earnings were released for the fourth quarter and fiscal year 2017.
Kinross Gold missed expectations by 2 cents per share on adjusted net earnings in the fourth quarter. The Canadian gold producer posted an adjusted earning per share of one cent, which is up 125% compared to fiscal 2016. The miss produced a negative surprise of 66.7%.
Source: Yahoo Finance
According to the company’s report, revenue for the fourth quarter of 2017 came in at $810.3 million. This was a 10.2% decline from the fourth quarter of 2016. The company missed consensus by $60 million.
Let’s have a look at the quarterly and yearly operating results:
The production of gold equivalent was 652,700 ounces in the quarter at an all-in sustaining (AISC) of $1,019 per ounce. The quarterly output of gold was 12.5% lower on a year over year basis while the AISC per ounce was nearly the same compared to the prior-year quarter.
For full fiscal 2017, the production of gold equivalent was 2.67 million ounces, a 4% decline on a year over year basis, and the AISC per ounce of metal sold was $954. In 2016 the company reported an AISC of $984 per ounce of metal sold.
Kinross Gold Corp also released its expectations on gold equivalent production and costs for full fiscal 2018. The volume of gold equivalent is predicted to be approximately 2.5 million ounces. Kinross Gold Corp projects an AISC of $975 per ounce of metal to be sold in 2018.
Kinross Gold Corp expects to use as capital expenditures during the entire year of 2018 are anticipated at $1.075 billion. The company will use about 63.3% of this total to sustain the advancement of mineral projects.
In addition, to secure the Paracatu mine’s operations with a long-lasting supply of electricity, Kinross Gold Corp has inked an agreement with Gerdau (GGB) for the acquisition of two Brazilian hydroelectric power plants. Thanks to this purchase, Kinross Gold hopes to lower production costs for the entire period in which the mine will be operating.
Kinross Gold Corp. has a market capitalization of $5.3 billion, a price-book (P/B) ratio of 1.13 times versus and industry average of 2.05 times, a price-sales (P/S) ratio of 1.39 times versus an industry median of 1.69 times and an EV-to-Ebitda of 4.78 versus an industry medina of 10.18 times.
The 52-weeks range is $3.15 to $4.91 per share. The recommendation rating is 2.5 and the average target price is $5.44 per share.
(Disclosure: I have no positions in any stock mentioned in this article.).
