Why Is Kinross Gold (KGC) Up 0.9% Since Last Earnings Report?

A month has passed since the last earnings report from Kinross Gold (KGC). In that time, the stock has seen a modest gain of about 0.9%, which is below the performance of the S&P 500.

The key question now is whether this positive trend will continue until the next earnings release, or if Kinross Gold is poised for a pullback. To better understand this situation, let’s review Kinross’ most recent earnings report to identify the crucial catalysts affecting the stock.

Kinross’ Q3 Earnings & Sales Surpass Estimates

In the third quarter of 2024, Kinross Gold reported a profit of $355.3 million, or 29 cents per share. This shows a significant increase from the $109.7 million, or 9 cents per share, reported during the same quarter last year. The adjusted earnings per share were 24 cents, up from 12 cents year over year, and this exceeded the Zacks Consensus Estimate of 18 cents.

The company’s revenues surged by 29.9% compared to the previous year, reaching $1,432 million, well above the Zacks Consensus Estimate of $1,186.7 million. This revenue growth was primarily driven by higher average realized gold prices.

Operational Insights

In terms of production, Kinross Gold produced 564,106 gold equivalent ounces in the reported quarter, which reflects a 4% decrease year over year but is still above the estimated production of 528,770 gold equivalent ounces. The average realized gold price for the quarter was $2,477 per ounce, representing a 28.4% increase from the previous year and exceeding the estimate of $2,244 per ounce.

The cost of sales per gold equivalent ounce was $976, which is a 7.1% increase from the prior-year quarter. However, this number was lower than the projected $997. Additionally, the all-in sustaining cost per gold equivalent ounce sold rose approximately 4.2% year over year to $1,350, beating the estimate of $1,372.

For the quarter, the margin per gold equivalent ounce sold jumped to $1,501, a remarkable increase of 47% from the previous quarter, which reported a margin of $1,018.

Financial Overview

Kinross Gold’s operating cash flow for the third quarter stood at $733.5 million, a significant rise from $406.8 million a year ago. Free cash flow also saw a substantial increase, reaching $414.6 million compared to $137.7 million in the prior-year quarter.

Future Outlook

Looking ahead, Kinross remains on track to achieve its production guidance of 2.1 million gold equivalent ounces (with a 5% margin) and to maintain its guidance for production costs, all-in sustaining cost, and capital expenditures for 2024. The company's annual production is expected to stabilize around 2 million gold equivalent ounces in both 2025 and 2026.

Analyst Estimates Update

Since the last earnings report, analysts’ estimates for Kinross Gold have trended upward significantly. The consensus estimate has moved by 34.33%, reflecting growing confidence in the stock’s performance.

Growth, Value, and Momentum Scores

Currently, Kinross Gold boasts a strong Growth Score of A, alongside a similar score of A on the momentum scale. On the value side, the stock also received an A rating, placing it in the top tier for this investment strategy. Overall, Kinross has an aggregate VGM Score of A, making it an appealing choice if investors are considering multiple strategies.

Overall Expectations

The upward trend in estimates appears promising, and Kinross Gold currently holds a Zacks Rank #3 (Hold). This indicates that investors can expect stable returns over the next few months.

Comparative Industry Performance

Kinross Gold operates within the Zacks Mining - Gold industry. Another notable player in the same sector, Agnico Eagle Mines, has performed well, gaining 2.8% over the last month since releasing its quarterly results.

Agnico reported revenues of $2.16 billion for its last quarter, which marks a 31.3% year-over-year increase. The company posted an EPS of $1.14 compared to $0.44 a year earlier. For the current quarter, Agnico is projected to report earnings of $1.15 per share, indicating a remarkable change of 101.8% from the previous year. Additionally, the Zacks Consensus Estimate has shown a 1.1% increase in the last 30 days. With a Zacks Rank #2 (Buy) and a VGM Score of A, Agnico is also positioned well within the industry.

Kinross, Gold, Earnings