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Kinross (KGC) to Post Q1 Earnings: What's in the Cards?

Zacks Equity Research

Kinross Gold Corporation KGC is set to release first-quarter 2020 results on May 5, after closing bell.

The company has a trailing four-quarter positive earnings surprise of 182.5%, on average. Kinross’ first-quarter results are likely to reflect the benefits of higher gold prices.  

The stock has surged 110.1% in the past year compared with the industry’s 82.2% rally.



Let’s see how things are shaping up for the upcoming earnings release.

What to Expect in Q1

Earlier this month, Kinross stated that it expects gold sales to be modestly lower than production for the first quarter due to the impact of the coronavirus pandemic on the timing of sales and shipments.

The company expects preliminary production for the first quarter to be around 560,000 gold equivalent ounces and sales of roughly 540,000 gold equivalent ounces. Per the company, production and sales have been partly affected by crisis-related contingency measures. Kinross expects preliminary cost of sales per ounce sold for the first quarter to be at the higher end of its original annual guidance.  

Other Factors at Play

Among metals, gold has been the bright spot in the first quarter as mounting fears over the coronavirus pandemic have made it the most attractive safe-haven asset. Also, slump in crude oil prices, a low interest rate environment and geopolitical tensions have boosted demand for gold. Concerns over supply crunch stemming from suspensions of operations by miners per government mandates also contributed to gain in gold prices this year.

In early March, gold prices surged past the $1,700 an ounce level for the first time in seven years, courtesy of the pandemic and a sharp decline in oil prices triggered by Saudi Arabia's price war with Russia. As such, Kinross’ first-quarter results are expected to reflect the benefits from higher gold prices.

Q1 Estimates

The Zacks Consensus Estimate for Kinross’ first-quarter production is currently pegged at 613,000 gold equivalent ounces, which calls for a sequential decline of 5.7%.

Kinross Gold Corporation Price and EPS Surprise

 

Kinross Gold Corporation Price and EPS Surprise
Kinross Gold Corporation Price and EPS Surprise

Kinross Gold Corporation price-eps-surprise | Kinross Gold Corporation Quote

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What the Zacks Model Says

Our proven model doesn’t predict an earnings beat for Kinross this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP for Kinross is -3.48%. The Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at 7 cents and 8 cents, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Kinross currently carries a Zacks Rank #2.

Stocks Likely to Beat Estimates

Here are some companies that you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this time around.

The Scotts Miracle-Gro Company SMG, scheduled to release second-quarter fiscal 2020 earnings on May 6, has an Earnings ESP of +1.49% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Wheaton Precious Metals Corp. WPM, scheduled to release first-quarter 2020 results on May 6, has an Earnings ESP of +3.19% and carries a Zacks Rank #2.

Yamana Gold Inc. AUY, slated to release first-quarter 2020 results on Apr 30, has an Earnings ESP of +7.14% and carries a Zacks Rank #3.

Zacks Top 10 Stocks for 2020

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Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

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Kinross Gold Corporation (KGC) : Free Stock Analysis Report
 
The Scotts Miracle-Gro Company (SMG) : Free Stock Analysis Report
 
Yamana Gold Inc. (AUY) : Free Stock Analysis Report
 
Wheaton Precious Metals Corp. (WPM) : Free Stock Analysis Report
 
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Zacks Investment Research