Friday, October 29, 2010

Goldcorp (NYSE:GG) Soars and Scores in Third Quarter

Goldcorp (NYSE:GG) soared over 5 percent by the close of trading Thursday, ending the session at $44.29, after a stunning performance in the third quarter.

What was most impressive was its management of costs, even though the reported story will probably be the fact they increased profits y four times the same quarter last year, reaching $4.66.5 million, or 63 cents a share. That's up from $114.2 million, or 16 cents a share, in 2009.

To add a little icing on the cake, they also doubled their dividend to 36 cents a share.

"Our confidence in the Company's financial position and ability to generate strong future cash flows led us to announce a 100% increase in our dividend," CEO Chuck Jeannes said.

Revenue for the quarter also rose nicely, increasing by 28 percent to $885.8 million.

While gold prices are an obvious benefit to every gold miner, it is those who have the discipline and knowledge to control costs who will survive and thrive, as the gold bull market won't last forever, and eventually gold prices alone won't be able to drive performance, which poor ones can be hidden because of the gold price climate we are now experiencing.

To show Goldcorp's ability and determination to control costs, in their first month of operations at their new flagship Penasquito mine, they were able to enjoy a negative cash cost in the first month of production. That's not an easy task to accomplish.

Stifel Nicolaus upgraded Goldcorp from "Hold" to "Buy," saying they see earnings and production growth to continue on.

Goldcorp gained $2.21, or 5.25 percent in Thursday trading. Stifel placed a price target of $53 on them.

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