AuRico Gold Earnings: Here’s Why Shares are Down

AuRico Gold (NYSE:AUQ) delivered a profit and met Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 2%.

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Earnings Cheat Sheet

Results: Net income increased to $29.5 million (10 cents per diluted share) in the quarter versus a net gain of $34.76 million in the year-earlier quarter.

Revenue: Decreased 31.22% to $77.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations

Reported adjusted net income of 10 cents per share. By that measure, the company met the mean analyst estimate of $0.10. It missed the average revenue estimate of $138.08 million.

Quoting Management

“During the quarter we announced the sale of the Ocampo mine, which is expected to close in mid-December. Following the completion of the transaction,  the Company will focus on delivering reliable, stable and consistent performance from our two remaining low-cost, long-life, core assets located in Canada and Mexico, which will underpin our commitment to shareholder friendly initiatives. Our expanding production base, strong cash position and growing free cash flow profile should provide a platform for shareholder value creation,” said Scott Perry, Chief Executive Officer. He continued, “Our production growth profile is primarily driven by the recently commissioned Young-Davidson mine, which reported solid production and cash cost results in its first month of commercial production. In the latter part of October, the first two underground stopes in the Upper Boundary Zone came into production and as a result, we expect strong production performance at the Young-Davidson mine due to the contribution of this higher grade underground ore during the fourth quarter.”

Key Stats:

Revenue decreased 4.98% from $81.14 million in the previous quarter. Net income increased 33.61% from $22.08 million in the previous quarter.

Looking Forward

Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.34 to a profit $0.23. For the current year, the average estimate has moved down from a profit of $0.5 to a profit of $0.34 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)

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