Why Kinross Gold’s Rebound Potential Seems Limited Right Now



Kinross Gold’s earnings performance

Kinross Gold (KGC) released its third-quarter earnings results after the market closed on November 7 and held its conference call the next day. It reported EPS of -$0.04, a $0.04 miss on analysts’ consensus estimate. Its revenue of $754 million also missed analysts’ expectation by 4.3%.

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Peers’ results

Most of Kinross’s peers have already reported their third-quarter earnings results. While Goldcorp missed analysts’ estimates by a wide marginBarrick Gold registered a slight beat. Agnico Eagle Mines (AEM) reported a third-quarter earnings beat and also increased its production guidance for 2018. Newmont Mining (NEM) beat earnings expectations but missed on revenue.

Negative stock momentum

Kinross’s momentum in 2018 so far has been negative, with its stock down over 40% YTD (year-to-date) as of November 20. For the same period, the VanEck Vectors Gold Miners ETF (GDX) is down only 17%, while the SPDR Gold Shares ETF (GLD) has fallen 6.5%.

KGC has also underperformed most of its close peers. Barrick Gold (ABX), Newmont Mining (NEM), and Goldcorp (GG) have fallen 10%, 12.3%, and 25.6%, respectively. Along with ongoing geopolitical issues, Kinross’s weak YTD operational performance has been the major driver of its underperformance.

Series overview

In this series, we’ll look at Kinross Gold’s latest earnings results in an attempt to understand its overall operational and financial standing. We’ll cover recent developments for some of its projects—especially the halt at its Tasiast Phase Two expansion—and what these developments could mean for investors.


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