* Goldcorp Q3 adjusted EPS $0.31 vs $0.19 a yr ago
* Agnico Q3 EPS $0.73 vs yr-ago loss of $0.11/shr
* Goldcorp, Agnico reaffirm full-yr production forecasts (Adds CEO, analyst comments, details on results, estimates; In U.S. dollars unless noted)
By Euan Rocha
Goldcorp, the world’s second largest gold company by market capitalization, reported a 65 percent increase in earnings and doubled its annual dividend payout.
“Continued strong gold demand in the third quarter, along with Goldcorp’s lowest quarterly cash costs in over two years resulted in record cash margins,” said Goldcorp Chief Executive Chuck Jeannes.
Vancouver-based Goldcorp said its adjusted earnings in the quarter rose to $231.5 million, or 31 cents a share, compared with $140.6 million, or 19 cents a share, a year earlier.
The earnings were in line with the Wall Street’s consensus forecast, according to Thomson Reuters I/B/E/S.
Gold sales in the third quarter were 568,100 ounces on production of 596,200 ounces. Quarterly revenue rose 28 percent to $885.8 million.
However, both production and sales volumes fell below year-ago levels, mainly due to lower than expected production from its Marigold, Alumbrera and Los Filos mines.
Jeannes characterized the quarter as a bit of a missed opportunity for Goldcorp.
“Our cost performance was so good and the Penasquito start-up was so good, had a few of the mines performed as expected it would have been a very strong quarter, relative to consensus expectations,” he said in an interview.
Jeannes said Goldcorp is extremely pleased with the ramp-up at its Penasquito mine in Mexico. The mine is expected to produce 180,000 ounces of gold in 2010.
Penasquito will be Mexico’s largest open pit mine once complete. Average annual output from the mine is expected to gradually rise to 500,000 ounces of gold, 28 million ounces of silver and over 450 million pounds of zinc.
Both Goldcorp and its smaller rival Agnico-Eagle reiterated their full-year production forecasts. Goldcorp expects output of about 2.55 million ounces in 2010, while Agnico expects its output to be between 1 million and 1.1 million ounces.
Agnico jumped to a third-quarter profit from a year-ago loss, when its results were hurt by a foreign exchange-related charge and production issues at its new mines.
Maison Placements analyst John Ing said the strong results from the gold miners were no surprise with the current price of gold, which hit a new record of $1,387.10 an ounce earlier this month. Spot gold XAU= currently trades at about $1325 an ounce.
The Toronto-based miner reported net income of $121.5 million, or 73 cents a share in the quarter ended Sept 30. That compared with a loss of $17 million, or 11 cents a share, in the same period of 2009.
Excluding items, the company reported earnings of 48 cents a share, which fell slightly shy of the Wall Street consensus view of 51 cents a share, according to Thomson Reuters I/B/E/S.
Quarterly revenue from mining operations more than doubled to $398.5 million, largely driven by a higher realized gold price and increased output from new mines.
Agnico’s gold output more than doubled to 285,179 ounces in the quarter, but average cash costs rose, largely due to start-up and commissioning costs at some of its new mines.
“The transformational phase at Agnico-Eagle is complete and has resulted in record earnings and cash flows per share. The next phase, one of optimization and expansion of our newly built mines, is underway,” Agnico’s Chief Executive Sean Boyd, said in a statement. ($1= $1.03 Canadian) (Reporting by Euan Rocha, additional reporting by Julie Gordon; editing by Rob Wilson and Carol Bishopric)