February 24, 2011 / 9:47 PM / 7 years ago

UPDATE 3-Goldcorp profit jumps on higher prices, production

* Q4 EPS $0.44 vs year-earlier profit of $0.09

* Q4 Adj EPS $0.57 vs year-earlier EPS of $0.25

* Raises full-yr dividend payout by 11 pct

* Shares up more than 2 pct after the bell (Adds analysts’ view, details; in U.S. dollars unless noted)

By Euan Rocha

TORONTO, Feb 24 (Reuters) - Goldcorp (G.TO) reported better than expected quarterly earnings on Thursday, as profits surged due to higher gold and silver prices and increased bullion production, sending its shares up more than 2 percent in after-hours trade.

Vancouver-based Goldcorp, the world’s second largest gold miner by market capitalization, also raised its full year dividend payout by 11 percent to 40 cents a share and outlined plans to develop two major gold projects in Canada.

Goldcorp said net income in the quarter ended Dec. 31 rose to $331.8 million, or 44 cents a share, from a year-earlier profit of $66.7 million, or 9 cents a share.

Excluding one-time items, earnings rose to $417.1 million, or 57 cents a share, from $182.7 million, or 25 cents a share.

Analysts on average had forecast earnings of 47 cents a share, according to Thomson Reuters I/B/E/S.

Quarterly revenue rose 70 percent to $1.32 billion.

Gold sales in the fourth quarter were 678,600 ounces on production of 689,600 ounces. This compares with sales of 573,100 ounces on production of 601,300 ounces in the fourth quarter of 2009.

The company said a strong performance at its Red Lake mine in northern Ontario and the first full quarter of commercial production at its Penasquito gold-silver mine in Mexico, helped drive production growth in the quarter.

Goldcorp also said its board has approved the full-scale development of the Eleonore project in Quebec and the Cochenour project in Ontario. The two projects are due to come online toward the end of 2014.

The company, which has more than doubled its output from the 1.15 million ounces of gold in 2005, expects to produce between 2.65 million and 2.75 million ounces this year. It sees production climbing to 4 million ounces by 2015.

Goldcorp has pursued aggressive growth in recent years. In September it agreed to buy Argentina-focused gold miner Andean Resources for C$3.6 billion ($3.7 billion), trumping a competing offer from fellow Canadian Eldorado Gold Corp (ELD.TO). [ID:nSGE6820BF]

Last February, among other acquisitions, Goldcorp bought a 70 percent interest in the El Morro copper-gold project in north-central Chile for about $513 million, outmaneuvering Barrick Gold (ABX.TO), which also tried to buy the asset. [ID:nN17143968]

Earlier this month, Goldcorp said that, as of the end of 2010, its proven and probable gold reserves had increased by 23 percent from a year earlier to 60.1 million ounces. Resources in the measured and indicated category rose 13 percent to 25.7 million ounces.

The company also has one of the largest silver holdings in the sector, with proven and probable silver reserves of 1.3 billion ounces and measured and indicated silver resources of 457.6 million ounces.

Both gold and silver prices are currently near record highs, with spot gold at XAU= $1,402.45 an ounce and spot silver at XAG= $32.15 an ounce.

“We expect a strong precious metals market to remain in 2011 and beyond, driven by central bank buying, growing physical demand in developing economies around the globe and gold’s continued re-emergence as an essential asset class for investment portfolios,” Chief Executive Chuck Jeannes said in a statement.

Shares of Goldcorp rose more than 2 percent to $46.16 after the closing bell, following release of the results. (Reporting by Euan Rocha; editing by Peter Galloway and Rob Wilson)

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