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Why Kinross Gold Stock Plunged after 4Q17 Earnings

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Kinross Gold’s 4Q17 earnings miss

Kinross Gold (KGC) released its 4Q17 and 2017 results on February 14, after the market closed, and held a conference call with analysts on February 15. The company reported earnings per share (or EPS) of $0.01, which were lower than the consensus estimate of $0.03. Its revenues of $810 million also came in below the market’s expectations of $870 million.

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Stock plunged after 4Q17 results

Kinross Gold stock dropped ~7% on February 15, underperforming the VanEck Vectors Gold Miners ETF (GDX), which fell just 1.0%. Goldcorp (GG) and Barrick Gold (ABX) also released their 4Q17 results on February 14 and held earnings calls the next day. Barrick Gold’s stock price fell 2.3% while Goldcorp’s stock rose 4.5% on February 15.

Kinross’s stock price decline after the results was mainly due to the earnings miss. Its production was also lower year-over-year (or YoY). The company has guided for even lower production for 2018, which investors didn’t seem to like. While the company has guided for 2018 all-in sustaining costs at the same level guided for 2017, the actual costs came in slightly lower.

Series overview

In this series, we’ll look at Kinross Gold’s 4Q17 results. We’ll also look at its production and cost performances. Plus, we’ll look at the recent developments for its development projects, especially the recently approved Tasiast Phase Two and Round Mountain Phase W expansions. We’ll also include some key takeaways from the company’s 4Q17 earnings call.

Kinross made another important announcement about acquiring two power plants for its Paracatu mine in Brazil from Gerdau (GGB). We’ll discuss the implications of this deal for the company in the next part of this series.

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