Why Is Kinross Gold (KGC) Up 0.9% Since Last Earnings Report?

It has been a month since Kinross Gold (KGC) released its last earnings report. During this period, the company's stock has increased by about 0.9%, a performance that has not quite matched the growth of the S&P 500. This raises questions about whether this upward trend will continue as the next earnings report approaches or if Kinross Gold is set for a decline.

To gain insights into the future direction of the stock, let's briefly review the company's latest earnings report and analyze recent investor and analyst sentiments.

Kinross’ Q3 Earnings & Sales Surpass Expectations

In the third quarter of 2024, Kinross Gold reported a profit of $355.3 million, which translates to 29 cents per share. This represents a significant increase compared to the $109.7 million, or 9 cents per share, earned in the same quarter the previous year. The adjusted earnings per share rose to 24 cents from 12 cents year over year, successfully beating the Zacks Consensus Estimate of 18 cents.

The company also saw revenues rise by 29.9% year over year, reaching $1,432 million, which was higher than the Zacks Consensus Estimate of $1,186.7 million. This growth was largely attributed to an increase in the average realized prices of gold.

Operational Performance

During the reported quarter, Kinross Gold produced 564,106 gold equivalent ounces, down 4% compared to the previous year. However, this figure was still above the expected estimate of 528,770 gold equivalent ounces. The average realized gold prices stood at $2,477 per ounce, marking a 28.4% increase from the same time last year. This figure also exceeded the expected average of $2,244 per ounce.

In terms of costs, the production cost of sales per gold equivalent ounce was $976, indicating a year-over-year increase of 7.1%, yet it was lower than the expected $997. The all-in-sustaining cost per gold equivalent ounce sold rose approximately 4.2% year over year to $1,350, which was again below the predicted $1,372.

Margins per gold equivalent ounce sold improved significantly, reaching $1,501 for the quarter, a 47% rise from the previous quarter's figure of $1,018.

Financial Overview

The operating cash flow in the third quarter of 2024 amounted to $733.5 million, compared to $406.8 million recorded a year prior. Free cash flow also saw an increase, rising to $414.6 million from $137.7 million a year ago.

Future Outlook

Looking ahead, Kinross Gold expects to meet its production guidance of 2.1 million gold equivalent ounces (+/- 5%) and forecasts for production costs, all-in-sustaining cost, and capital expenditures for 2024. The company anticipates that its annual production will remain stable, projected to be around 2 million gold equivalent ounces in 2025 and 2026.

Estimate Movement Trends

Since the earnings report, there has been a notable upward shift in estimates for Kinross Gold. The consensus estimate has increased by about 34.33% due to these adjustments.

VGM Score Analysis

Currently, Kinross Gold holds strong Growth and Momentum Scores of A, alongside a value grade of also A. This combination places the stock in the top tier for investment strategies based on these factors, leading to an overall VGM Score of A. If you are not concentrating on a single strategy, this composite score merits attention.

Industry Comparison

In the context of its industry, Kinross Gold is a player within the Zacks Mining - Gold sector. A comparable company, Agnico Eagle Mines (AEM), has experienced a gain of 2.8% over the past month. Agnico, which recently reported revenues of $2.16 billion for the quarter ending September 2024, exhibited a year-over-year increase of 31.3%. Their earnings per share for that period was $1.14, leaping from $0.44 from a year ago.

Agnico is expected to post earnings of $1.15 per share for the current quarter, reflecting a remarkable change of 101.8% from the previous year. The consensus estimate for Agnico has also seen a positive adjustment of 1.1% in the last 30 days, and the company holds a Zacks Rank #2 (Buy) supported by favorable estimate revisions. Similar to Kinross Gold, Agnico also benefits from a VGM Score of A.

Kinross, Gold, Earnings