Goldcorp Inc. (GG, G.TO) on Wednesday reported a 62% fall in net income for the third quarter from last year, hurt by a foreign exchange loss compared to a hefty foreign exchange gain in the year-ago period. Excluding items, adjusted earnings per share for the quarter more than doubled from the prior year and beat analysts' consensus estimate. Looking ahead, the company raised its gold production outlook, while it lowered its outlook for cash costs for the full year.
Third-Quarter Results
The Vancouver, Canada-based gold producer's net income for the third quarter was US$114.2 million or US$0.16 per share, down from US$297.2 million or US$0.42 per share for the year-ago quarter.
The latest quarter's results include a non-cash foreign exchange loss of US$28.1 million on the revaluation of future income tax liabilities, while the year-ago period's results include a foreign exchange gain of US$253.7 million.
Excluding items, adjusted net income for the third quarter rose to US$140.6 million or US$0.19 per share from US$64.7 million or US$0.09 per share in the prior-year quarter. On average, fifteen analysts polled by Thomson Reuters expected the company to earn US$0.16 per share for the second quarter. Analysts' estimate typically exclude special items.
Adjusted net earnings include the impact of non-cash stock option expenses, which amounted to approximately US$0.02 per share for the quarter.
Revenue for the third quarter climbed 25% to US$691.9 million from US$552.2 million in the same quarter last year, and beat analysts consensus revenue estimate of US$614.34 million.
Chuck Jeannes, President and Chief Executive Officer of Goldcorp said, "Consistent with our 2009 theme of execution throughout our operations, Goldcorp's gold production and cash costs were again very strong in the third quarter."
Peer Performance
In late October, Barrick Gold Corp. (ABX, ABX.TO) reported a net loss for the third quarter compared to a profit in the year-ago period. The latest quarter's results reflect a US$ 5.7 billion charge related to the windup of the company's gold hedging program. The world's largest gold producer posted a net loss of US$5.35 billion or US$6.07 per share, compared to net income of US$254 million or US$0.29 per share in the year-ago quarter. Sales for the quarter increased to US$2.10 billion from US$1.88 billion from the prior-year period.
On Tuesday, Yamana Gold Inc. (AUY, YRI.TO, YAU.L) reported a 60% fall in profit for the third quarter from last year, hurt by a loss on commodity derivatives compared to hefty gain on commodity derivatives in the year-ago period. The company's net earnings for the third quarter dropped to US$60.82 million or US$0.08 per share from US$150.20 million or US$0.21 per share in the year-ago quarter. However, revenues for the quarter surged 50% to US$333.18 million from US$221.62 million in the year-ago quarter.
Other Metrics
Goldcorp's operating expenses for the quarter were US$303.4 million, up from US$279.1 million in the year-ago quarter.
Earnings from mine operations rose to US$257.8 million from US$150.3 million a year ago. Earnings from operations for the quarter were US$217.9 million, up from US$99.4 million in the same period last year.
The company's gold production in the quarter rose 11% from the year-ago period to 621,100 ounces. Gold sales in the quarter increased 9.3% from last year to 601,500 ounces, at a total cash cost of US$295 per ounce on a by-product basis and US$384 per ounce on a co-product basis. Average realized gold price for the quarter rose to US$968 per ounce from US$865 per ounce a year ago.
Silver production for the quarter was 2.98 million ounces, up from 2.27 million ounces in the prior-year period. Silver sold rose to 2.39 million ounces from 1.72 million ounces in the year-ago period. Average realized silver price for the quarter was US$9.30 per ounce, up from US$7.64 per ounce in the prior-year quarter.
Copper produced as well as sold during the quarter declined from a year ago, while average realized copper price for the quarter increased from last year.
Year-To-Date Results
For the first nine months of fiscal year 2009, Goldcorp's net income dropped to US$173.5 million or US$0.24 per share, from US$517.5 million or US$0.72 per share in the same period last year.
Adjusted net income for the period increased to US$405.5 million or US$0.55 per share from US$312.6 million or US$0.44 per share in the prior-year period.
Revenue for the nine-month period rose to US$1.95 billion from US$1.81 billion in the year-ago period.
Outlook
For fiscal year 2009, Goldcorp raised its gold production guidance to about 2.4 million ounces from the prior 2.3 million ounces, citing continued strength in production at many of its key gold mines.
Total cash costs for the year are now expected by the company to be approximately US$300 per ounce of gold on a by-product basis, down from the previous guidance of US$365 per ounce. On a co-product basis, total cash costs are now expected to be less than US$400 per ounce compared to previous guidance of US$400 per ounce.
CEO Jeannes said, "Gold prices have exhibited continued strength and sustainability above US$1,000 per ounce, and with our production and cash costs trending positively, the stage is set for continued strength in cash flow and profitability through the end of the year and beyond."
Stock Quotes
GG closed Wednesday's regular trading session on the NYSE at US$39.88, down US$0.24 or 0.60% on a volume of 14.99 million shares. In the past 52 weeks, the stock has been trading in a range of US$17.05-US$43.41.
On the Toronto Stock Exchange, G.TO closed Wednesday's trading at C$42.64, down C$0.32 or 0.74% on a volume of 3.56 million shares. In the 52-week period, the stock has been trading in a range of C$21.87-C$46.45.
For comments and feedback: editorial@rttnews.com