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Kinross Gold (KGC) Up 0.7% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Kinross Gold (KGC). Shares have added about 0.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Kinross Gold due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Kinross' Earnings Miss Estimates in Q3, Revenues Up Y/Y

Kinross Gold reported profits of $65.9 million or 5 cents per share in third-quarter 2022 compared with a loss of $72.9 million or 6 cents reported in the year-ago quarter. Earnings per share missed the Zacks Consensus Estimate of 6 cents.

Revenues rose around 47% year over year to $856.5 million.

Operational Performance

The company produced 529,155 gold equivalent ounces from continuing operations in the reported quarter, up 61% year over year. The upside was due to higher production at Tasiast, Paracatu and La Coipa.

Average realized gold prices were $1,732 per ounce in the quarter, down around 3% from the year-ago quarter’s figure.

The production cost of sales per gold equivalent ounce was $941, up around 6% from the prior-year quarter. All-in sustaining cost per gold equivalent ounce sold fell roughly 6% year over year to $1,282.

Margin per gold equivalent ounce sold was $791 in the quarter, down from the prior quarter’s level of $901.

Financial Review

Cash and cash equivalents were $488.4 million at the end of the reported quarter, down around 17% year over year. Long-term debt was $2,471.6 million at the end of the quarter, up around 77% year over year.

Adjusted operating cash flow increased around 84% year over year in the third quarter to $259.4 million.

Outlook

For 2022, Kinross expects production to be around 2 million gold equivalent ounces factoring in slower-than-expected ramp-up at La Coipa and challenges related to commissioning the Tasiast 21k project.

The company expects to be modestly above its revised production cost of sales of roughly $900 per gold equivalent ounce for the year and in line with its all-in sustaining cost per ounce guidance of around $1,240.

Capital expenditures are predicted at around $750 million for this year.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

The consensus estimate has shifted -5.88% due to these changes.

VGM Scores

Currently, Kinross Gold has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Kinross Gold has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Kinross Gold is part of the Zacks Mining - Gold industry. Over the past month, Agnico Eagle Mines (AEM), a stock from the same industry, has gained 8.7%. The company reported its results for the quarter ended September 2022 more than a month ago.

Agnico reported revenues of $1.45 billion in the last reported quarter, representing a year-over-year change of +48.8%. EPS of $0.52 for the same period compares with $0.60 a year ago.

For the current quarter, Agnico is expected to post earnings of $0.40 per share, indicating a change of -13% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.3% over the last 30 days.

Agnico has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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