Canada Stockwatch – Goldcorp Puts Positive Spin On Disappointing Earnings In Q1

Canada Stockwatch – Goldcorp Inc. (TSE:G, Mkt cap 18.22B, P/E – , Div/yield 0.06/3.30, EPS -3.57, Shares 829.40M) remains optimistic about the second half of 2015, despite reporting much weaker-than-expected first quarter results last week.

Canada Stockwatch Goldcorp House Perth Mint

Canada Stockwatch – Goldcorp House at the Perth Mint: putting a positive spin on disappointing Q1 earnings.

As the Financial Post reports, shrinking margins, higher depreciation and depletion expenses, combined with a higher effective tax rate, all took their toll on the gold producer’s bottom line in the first three months of the year.

Adjusted profit came in at just US$12 million, or a penny a share – lower than even the most pessimistic analyst estimates. With one-time items factored in, Goldcorp showed an overall net loss of US$87 million for the three-month period.

However, the Vancouver-based company may take some solace in the fact that fellow gold businesses Barrick Gold Corp. and Yamana Gold Inc. both also reported disappointing earnings in the past week.

Goldcorp’s average gold sale price in Q1 was US$1,217 an ounce, which represents a relatively modest decline from US$1,297 in the same period 12 months ago. Meanwhile, all-in sustaining costs were US$885 an ounce, up US$40 year-over-year.

Goldcorp, the world’s biggest gold miner in terms of market value, has said it will not restrict its production demands in light of the results, nor has it chosen to alter its cost guidance for the year. However, the company raised its tax guidance.

Chief executive Chuck Jeannes said the firm remains resilient in face of disappointing earnings, adding that it is remains on the lookout for possible acquisitions.

“We are pleased to begin 2015 with strong cash flow performance,” he said in a statement. “Our primary focus in 2015 is on safely executing our plans and forecasts.”

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