The stock in Alio Gold Inc. (ALO, Financial) tumbled nearly 17% to $1.05 on the NYSE on the heels of the financial results for the second quarter of 2018, which were released on Friday, Aug. 10 before the opening bell.
The company invoiced metal customers for $26.2 million, which was a 3.3% decline year over year. The decrease in the second quarter turnover was a result of a lower volume of gold ounces placed on the market compared to the prior-year quarter. The precious metal was supportive but not enough to fully offset the drop in the sales volume.
Because of an increase in the all-in sustain cost of $1,314 per ounce of gold sold, which squeezed the gold margin, the company closed the second quarter of fiscal 2018 with a lower net profit of 5 cents per share and a cash outflow from operating activities of $8.29 million, compared to the same quarter of 2017. Higher taxes calculated on the quarterly income also impinged on the operating cash flow.
Last year the company reported a net profit of 10 cents per share and operating cash inflows of $2.77 million.
During the second quarter of 2018, operations of the company absorbed more resources than what they were able to put in. So, the amount of cash on hand and securities diminished by 8% to $29.7 million from a previous amount of $32.26 million, which was available at the end of the first quarter of 2018.
For the remainder of 2018 the company will focus on improving operations at the San Francisco mine and at the Florida Canyon mine. The company didn’t release her expectations on production and costs for the entire year of 2018.
The stock in Alio Gold has a market capitalization of $110.96 million and the current share price is below the 200, 100 and 50-SMA lines. The 52 weeks range is $1.02 to $4.94 per share.
The recommendation rating is 2.4 out of 5 and the average target price is $5.47 per share.
(Disclosure: I have no positions in Alio Gold.)
