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

Kinross Gold Corporation KGC 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.

 

Kinross Gold Corporation Price, Consensus and EPS Surprise

 

Kinross Gold Corporation Price, Consensus and EPS Surprise
Kinross Gold Corporation Price, Consensus and EPS Surprise

Kinross Gold Corporation price-consensus-eps-surprise-chart | Kinross Gold Corporation Quote

 

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.

Price Performance

Shares of Kinross have declined 40.1% in the past year compared with an 11.1% fall of the industry.

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Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

Zacks Rank & Key Picks

Kinross currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks worth considering in the basic materials space include Sociedad Quimica y Minera de Chile S.A. SQM, Commercial Metals Company CMC and Reliance Steel & Aluminum Co. RS.

Sociedad has a projected earnings growth rate of 538.1% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 1.2% upward in the past 60 days.

Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied roughly 60% in a year. The company currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Commercial Metals currently carries a Zacks Rank #1. The Zacks Consensus Estimate for CMC's current-year earnings has been revised 3.8% upward in the past 60 days.

Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 38% in a year.

Reliance Steel, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 29.7% for the current year. The Zacks Consensus Estimate for RS's current-year earnings has been revised 0.1% upward in the past 60 days.

Reliance Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13.6%, on average. RS has gained around 28% in a year.


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