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Thursday, February 16, 2012

Kinross Gold (KGC) Short of Expectations for Quarter

Kinross Gold (NYSE:KGC) missed analysts' expectations in its latest quarter by $0.04, as the company reported earnings of $0.17 a share, down from the $0.21 a share analysts from Thomson Reuters were looking for.

The gold miner said they had a loss of $2.78 billion, citing a write down of its Tasiast mine in West Africa, which they inherited when they acquired Red Back Mining.

Kinross CEO and president Tye Burt said Tasiast is on the front burner for projects of the company, because of "its high returns."

From there, Burt said the company will work the Dvoinoye project in Russia, Lobo Marte in Chile and FDN in Ecuador ... in that order.

For the quarter ending December 31, Kinross reported a loss of $2.45 a share, compared to a loss of $72.9 million, or six cents a share in the same quarter last year.

Revenue jumped from $920.4 million to $949.4 million during that same period.

The charge against Tasiast was $2.49 billion, with an additional charge of $447.5 million from its Chirano project. Last month the company said the Tasiast project could be delayed as long as nine months.

Minus the one-off charges, Kinross said earnings came in at $196.6 million, or 17 cents a share, in comparison to $158.5 million, or 14 cents a share in the same quarter last year.

Costs of sales are also challenging company results, as they jumped from $535 an ounce of gold to $636 an ounce.

Kinross also said it was lowering its capex for 2012, cutting spending estimates from $2.5 billion to $2.2 billion. Originally they had set aside $1.3 billion for growth project, which is now slashed to $1 billion for 2012.

Gold production estimates for 2012 from Kinross are from $2.6 million to $2.8 million gold-equivalent ounces, although it'll be at a higher cost of between $670 to $715 an ounce.

Silver production for 2012 is estimated to come in at between $7.5 million to 8.0 million ounces.

Recent analyst action had Deutsche Bank (NYSE: DB) cutting its price target on Kinross Gold to $85.00 a share.

Veritas Investment Research just announced they have a "Sell" rating on Kinross now, citing free cash flow concerns and its vulnerability.

Kinross closed Wednesday at $10.31, falling $0.08, or 0.77 percent.

1 comment:

ahnn said...

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