Goldcorp (GG) Down 3.8% Since Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Goldcorp Inc. GG. Shares have lost about 3.8% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is GG due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Goldcorp's Q4 Earnings and Revenues Miss Estimates

Goldcorp reported net earnings of $242 million or 28 cents per share for fourth-quarter 2017 compared with $101 million or 12 cents recorded a year ago.

Barring one-time items, adjusted earnings for the quarter came in at 10 cents per share, which missed the Zacks Consensus Estimate of 11 cents.

Goldcorp recorded revenues of $853 million in the fourth quarter, down roughly 5% year over year. The figure also missed the Zacks Consensus Estimate of $870 million.

Gold sales went down around 17.6% year over year to 633,000 ounces in the fourth quarter and production fell 15.1% to 646,000 ounces. AISC were $870 per gold ounce (up roughly 16.5% year over year).

Full-Year 2017 Results

For 2017, Goldcorp reported net earnings of $658 million or 76 cents per share, up from $162 million or 19 cents per share in 2016.

Revenues went down roughly 2.5% year over year to $3,423 million.

Mining Highlights

At the Penasquito mine, gold production was 83,000 ounces, marking a decrease of 54.6% year over year from 183,000 ounces. AISC was $571 per ounce, up 17.2% from $487 in the year-ago quarter.

At the Cerro Negro in Argentina, gold production went up a whopping 97% to 130,000 ounces. AISC was $672 per ounce compared with $1,024 recorded in the year-ago quarter.

At the Pueblo Viejo mine, gold production was 122,000 ounces, down 3.9% year over year. AISC was $496 per ounce compared with $311 in the year-ago quarter.

Financial Position

Goldcorp’s cash and cash equivalents rose 18.5% year over year to $186 million. The company had adjusted net debt of $2,108 million at the end of 2017 compared with $2,216 million in 2016.

The company recorded operating cash flow of $1.2 billion for 2017, compared with $800 million in 2016.

Outlook

Goldcorp expects gold production of 2.5 million ounces (+/- 5%) for 2018 and AISC has been projected to further decline to roughly $800 per ounce (+/- 5%). Goldcorp stated that it continues to realize savings from its program and is aiming to achieve roughly $250 million of annual sustainable efficiencies.  

Goldcorp also expects sustaining capital expenditure to be $550 million for 2018.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.

Goldcorp Inc. Price and Consensus

Goldcorp Inc. Price and Consensus | Goldcorp Inc. Quote

VGM Scores

At this time, GG has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate investors will probably be better served looking elsewhere.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of this revision indicates a downward shift. Interestingly, GG has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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