Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and Goldcorp Inc. (USA) (NYSE:GG) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
Goldcorp Inc.Goldcorp has been just one of many mining companies that have underperformed the price of gold over the past year, with the SPDR Gold Trust (ETF) (NYSEARCA:GLD) bullion-tracking fund far outpacing the broad group of miners within the Market Vectors Gold Miners ETF (NYSEARCA:GDX). But could better times lie ahead for Goldcorp? Let’s take an early look at what’s been happening with Goldcorp over the past quarter and what we’re likely to see in its quarterly report on Thursday.
Stats on Goldcorp
|Analyst EPS Estimate||$0.54|
|Change From Year-Ago EPS||(18%)|
|Revenue Estimate||$1.56 billion|
|Change From Year-Ago Revenue||3.1%|
|Earnings Beats in Past 4 Quarters||2|
Will Goldcorp look shinier this quarter?
Over the past few months, analysts have taken $0.03 per share off their consensus earnings figures for Goldcorp’s fourth quarter, with much more dramatic downward revisions of about $0.80 for full-year 2013 earnings per share. The stock hasn’t responded favorably, dropping more than 20% just since early November.
Goldcorp has already given investors useful information on where it’s been and where it sees itself going. With gold production of nearly 700,000 ounces in the fourth quarter, Goldcorp expects to boost production by 10% this year and at a better-than-10% annual clip between now and 2017. Yet it expects cash costs net of by-product revenue to remain below $500 per ounce, supporting its recent 11% dividend increase.
But that growth won’t come without occasional setbacks. Goldcorp is continuing to deal with the aftermath of production shortfalls at its key Penasquito mine, with drought-related issues having forced the company to reduce forecasts for output last year. Yet thanks to Goldcorp’s having sold off streaming rights to production at Penasquito, Silver Wheaton Corp. (USA) (NYSE:SLW) and Royal Gold, Inc USA) (NASDAQ:RGLD) are effectively sharing the risk from that shortfall. More importantly, the company sees the water issues at Penasquito as short-term in nature.