IAMGOLD Earnings: Here’s Why Investors Don’t Like These Results

IAMGOLD Corp. (NYSE:IAG) delivered a profit and beat Wall Street’s expectations, BUT 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 2.18%.

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IAMGOLD Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 40% to $0.15 in the quarter versus EPS of $0.25 in the year-earlier quarter.

Revenue: Decreased 24.47% to $305.3 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: IAMGOLD Corp. reported adjusted EPS income of $0.15 per share. By that measure, the company beat the mean analyst estimate of $0.14. It missed the average revenue estimate of $381.28 million.

Quoting Management: “With the initiation of our $100 million cost reduction program before the drop in gold prices and our history of disciplined capital allocation, IAMGOLD was well ahead of the curve in responding to the challenges in our industry,” said Steve Letwin, President and CEO. “We are very encouraged with cash costs coming in at $787 an ounce, $63 below the bottom of our guidance, and we will revisit our cost guidance in the second quarter. At the same time, our continued focus on maintaining a strong balance sheet gives us the option of deferring capital expenditures apart from what is essential to sustaining the current operations. We will move forward only with expansion and development projects that meet our criteria for delivering attractive returns. The traction we are making on the cost front together with our renewed commitment to capital discipline points to a positive outlook ahead.
“Meanwhile, we continue to execute on our business plan, and brought Westwood into production as scheduled at the end of the first quarter,” continued Mr. Letwin . “And in mid-April, the National Assembly of the Government of Suriname unanimously approved the joint venture agreement respecting future resource development and related power costs. The 50% reduction in the power rate applicable to new concessions and future expansions beyond the one currently under review will open a new chapter for Rosebel. We continue to have dialogue with the government with respect to power rates at the existing Rosebel operation.”

Key Stats (on next page)…

Revenue decreased 34.82% from $468.4 million in the previous quarter. EPS decreased 37.5% from $0.24 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 $0.17 to a profit $0.12. For the current year, the average estimate has moved down from a profit of $1.02 to a profit of $0.55 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)