Randgold Resources Earnings: Here’s Why Shares are Up Now

Randgold Resources Ltd. (NASDAQ:GOLD) delivered a profit and missed 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 up 1.35%.

Randgold Resources Ltd. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 60.32% to $0.5 in the quarter versus EPS of $1.26 in the year-earlier quarter.

Revenue: Decreased 32.91% to $233.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Randgold Resources Ltd. reported adjusted EPS income of $0.5 per share. By that measure, the company missed the mean analyst estimate of $0.54. It missed the average revenue estimate of $456.2 million.

Quoting Management: Speaking at a presentation on Randgold’s quarterly results, chief
executive Mark Bristow noted that the company’s business model had been designed to deliver returns at lower gold prices, and it had therefore not been forced to write down its reserves as these had been calculated at US$1 000/oz. Randgold had, however, reviewed all its business plans at the beginning of the year and where necessary aligned them to the drop in the gold price.
“Our giant Kibali project is scheduled to start gold
production in October, Loulo and Gounkoto are both accessing higher grade sections in their orebodies, Tongon is continuing its turnaround and improved efficiencies across the group have already cut our total cash cost per ounce by 5% this past quarter. In addition, projects are underway across the group to increase throughput and recoveries and reduce unit costs further,” he said.

Key Stats (on next page)…

Revenue decreased 20.24% from $292.37 million in the previous quarter. EPS decreased 33.33% from $0.75 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 $1.13 to a profit $0.59. For the current year, the average estimate has moved down from a profit of $4.62 to a profit of $3.3 over the last ninety days.

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