Goldcorp Q2 Profit Rises

This is the first time since the third-quarter of 2012 that Goldcorp is able to become cash-flow positive. The company reported $0.01 EPS for the quarter, missing the Thomson Reuters consensus estimate of $0.10 by $0.09. The move will save Goldcorp nearly $300 million US a year.

Like most of its peers, Goldcorp continues to work on lowering costs and shoring up its balance sheet. Those means and to discover the dividend trim are to effectively “ensure the organization uses the monetary flexion to be succesful a fickle blonde market”, Goldcorp Chief Executive Officer Chuck Jeannes said within the assertion. Gold for December delivery fell 0.4 percent to settle at $1,088.70 at 1:52 p.m.in New York.

Revenue grew to $1.19 billion, up from $884 million a year ago.

Vancouver-based Goldcorp said net earnings were $392 million, or 47 cents a share, in its latest quarter, up from $183 million, or 22 cents, a year earlier. Profit excluding one-time items was 8 cents a share, beating the 7-cent average of 20 estimates compiled by Bloomberg. Barclays reaffirmed an “overweight” rating and set a $23.00 price objective (down previously from $25.00) on shares of Goldcorp in a research report on Thursday, July 16th. That was one cent higher than market expectations, but lower than last year due to lower bullion prices and costs linked to construction of a new mine in Quebec and another one in Argentina.

By comparison, companywide all-in sustaining costs, a measure to compare miners’ performance, were $846 an ounce in the second quarter, better than the $943.50 average of six estimates. Fourteen analysts estimated an average of 824,900 ounces of output.

Guidance improved, production expected at top end, AISC reduced $38/oz at the mid-point: Production now expected at the top end of 3.3-3.6Moz due to higher grades at Penasquito and a strong ramp up at Cerro Negro, offsetting a slower than planned ramp at Eleonore. That is an improvement from previous guidance of $875 to $950 an ounce.

If the price remains below $1,100 for a prolonged period, Goldcorp would have to dip into its credit facility to keep paying the higher dividend, which does not make sense to Jeannes.