Heading into earnings day, Wall Street had expected Eldorado to report positive profits of $0.06 per share on sales of $228.3 million. Instead, Eldorado lost $0.04 per share, and sales were only $217.7 million.
And that's the good news. The bad news is that Eldorado's $0.04 per share loss was only a pro forma number, not calculated according to generally accepted accounting principles (GAAP). The company's actual GAAP loss for the quarter came to $0.27 per share, and free cash flow for the quarter was also negative -- $25.9 million.
Eldorado blamed a lower price for gold in the quarter for the fact that earnings went down, not up. But in fact, a whole slew of Eldorado's numbers were heading in that direction during the quarter: gold ounces produced and gold ounces sold, both down 5%; price per ounce also down 5%; and total revenue down 9%.
About the only numbers going up in the quarter were costs -- production costs rose 12% and Eldorado's total cash costs for its operations shot up 20%.
Eldorado Gold is now in the unenviable position of being an unprofitable gold mining stock in a market where investors have their pick of profitable alternatives -- Agnico Eagle Mines, for example, which sells for a P/E ratio of about 26 times earnings, or Yamana Gold or Barrick Gold, both priced in the mid-teens.
Although Eldorado is arguably the stock with the most room to grow from its tiny $1 billion market capitalization, I wouldn't argue that it looks like much of a buy right now.