Goldcorp Earnings: An Early Look

Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and Goldcorp (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 has been just one of many mining companies that have underperformed the price of gold over the past year, with the SPDR Gold (NYSEMKT: GLD  ) bullion-tracking fund far outpacing the broad group of miners within the Market Vectors Gold Miners ETF (NYSEMKT: 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

Source: Yahoo! Finance.

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 (NYSE: SLW  ) and Royal Gold (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.

Looking closely at Goldcorp's numbers will be important when it releases its earnings report, but you should also pay close attention to comments from Goldcorp's executive team. Having demonstrated strong leadership in addressing long-term concerns rather than overreacting to short-term trouble, Goldcorp's management is worth listening to as a gauge for where the stock could go in the long run.

Learn more
Get the complete picture of Goldcorp's long-term prospects from Fool metals expert Christopher Barker in his premium report on the gold miner. Inside, you'll find out why Goldcorp is among the top gold stocks in the market with its many successful acquisitions and low-cost production. Click here to discover more about this mining specialist.

Click here to add Goldcorp to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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