Goldcorp Inc. (G), the second-largest gold producer by market value, reported first-quarter earnings that trailed analysts’ estimates as production declined at a Canadian mine and costs rose.
Net income fell 26 percent to $479 million, or 51 cents a share, from $651 million, or 81 cents, a year earlier, the Vancouver-based company said today in a statement. Profit excluding mark-to-market gains on securities and other one-time items was 50 cents a share, less than the 53-cent average of 18 estimates compiled by Bloomberg. Sales climbed 11 percent to $1.35 billion from $1.22 billion.
The company said gold output fell 39 percent at Red Lake in Ontario, Goldcorp’s top producer, because of difficult ground conditions and lower-than-expected grades. The company produced a total of 524,700 ounces of gold in the first quarter, compared with 637,600 ounces a year earlier. George Topping, a Toronto- based analyst at Stifel Nicolaus & Co., had estimated production of 572,400 ounces.
Goldcorp planned to boost annual production by about 70 percent to 4.2 million ounces by 2016, Chief Executive Officer Chuck Jeannes said Feb. 16. Gold, which has risen for 11 straight years, averaged $1,694 in the first quarter in New York, 22 percent more than a year earlier.
Goldcorp said it’s “analyzing the potential impact” of first-quarter production delays at Red Lake to its forecasts for 2012 output and costs. The company said in January it expected to produce 2.6 million ounces of gold this year at costs of $550 to $600 per ounce.
Goldcorp said its average cost to produce and sell gold increased in the first quarter, primarily because of lower gold production. So-called co-product cash costs were $648 an ounce in the quarter compared with $504 a year earlier, the company said.
Brian Yu, an analyst at Citigroup Inc. in San Francisco, had estimated average costs of $571 an ounce. Topping estimated $628.
Goldcorp released its earnings after the end of regular trading in Toronto, where the shares rose 1.4 percent to close at C$40.49. The stock has dropped 10 percent this year, compared with a 14 percent decline in the S&P/TSX Global Gold (SPTSGD) Index.
Barrick Gold Corp. (ABX), based in Toronto, is the world’s largest producer of the metal.
(Goldcorp scheduled a conference call to discuss results at 1 p.m. New York time tomorrow, accessible in Canada and the U.S. at 1-800-355-4959 and for international callers at 1-416-695-6617.)