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What's in Store for Kirkland Lake Gold's (KL) Q1 Earnings?

Zacks Equity Research

Kirkland Lake Gold Ltd. KL is set to release first-quarter 2020 results on May 6, before the opening bell.

The company has a trailing four-quarter positive earnings surprise of 3.3%, on average. First-quarter results are likely to reflect the benefits from higher production at Fosterville and increased gold prices on a year-over-year basis.  

The stock has gained 35.6% in the past year compared with the industry’s 86.9% rally.

Let’s see how things are shaping up for this announcement.

What to Expect in Q1

In April, the company released production figures for first-quarter 2020.

Total gold production for the first quarter rose 43% year over year to 330,864 ounces. Total gold poured in the first quarter were 326,933 ounces. Gold production for the quarter includes 91,555 ounces related to production from Detour Lake Mine.

Fosterville continued to demonstrate strong performance with production increasing 24% year over year to 159,864 ounces. Production at Macassa fell 30.1% year over year to 50,861 ounces in the first quarter. Production at Holt Complex dropped 6.8% year over year to 28,584 ounces.

Other Factors to Consider

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.  

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.  

Q1 Estimates

The Zacks Consensus Estimate for first-quarter total revenues is currently pegged at $523 million, which calls for 71.5% increase on a year-over-year basis.

Kirkland Lake Gold Ltd. Price and EPS Surprise


Kirkland Lake Gold Ltd. Price and EPS Surprise

Kirkland Lake Gold Ltd. price-eps-surprise | Kirkland Lake Gold Ltd. Quote


What the Zacks Model Says

Our proven model doesn’t predict an earnings beat for Kirkland Lake Gold 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 Kirkland Lake Gold is 0.00%. The Most Accurate Estimate and the Zacks Consensus Estimate are both currently pegged at 82 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Kirkland Lake Gold currently carries a Zacks Rank #3.

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 +0.39% and carries a Zacks Rank #2.

Domtar Corporation UFS, slated to release first-quarter 2020 results on May 8, has an Earnings ESP of +39.81% and carries a Zacks Rank #3.

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