Gold Miner Randgold Tanking on Weak Results


Randgold Resources Ltd. (NASDAQ: GOLD) reported third-quarter 2012 earnings this morning. The gold mining company posted basic earnings per share (EPS) of $1.12 on revenues of $319.87 million. In the same period a year ago, the company reported EPS of $1.28 on revenues of $345.36 million. Third-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.28 and $366.5 million in revenues. Randgold trades ADRs in the United States, and one ADR is equal to one share of common stock.

The company's CEO said:

The challenges we faced are to be expected when you develop and run mines in remote parts of Africa and, as our record shows, we're more than capable of managing them. They should not cloud the real achievements of the quarter. … Production and costs for the final quarter are forecast to again show significant improvements

The company made no comment on its outlook, but the consensus estimates call for fourth-quarter EPS of $1.68 on revenues of $428.6 million. For the full year, the EPS estimate is $5.46 on revenue of $1.7 billion.

Profits were down 15% year-over-year, which the company attributed to lower sales. Production rose to 204,475 ounces at a total cash cost per ounce of $737, down from $747 a year ago but up sequentially from $703. The higher costs were attributed to lower grade ores and higher power costs.

Production fell 10% sequentially, which Randgold attributed to "the timing of gold shipments at quarter end being disrupted by the annual stock take at the refinery." The company reported an average gold price of $1,641 per ounce, up sequentially from $1,600.

The company's shares are down more than 6% in premarket trading this morning, at $114.04 in a 52-week range of $72.91 to $127.27. The consensus target price for the shares was around $138.25 before today's report.

Paul Ausick

Filed under: 24/7 Wall St. Wire, ADR, Commodities & Metals, Earnings Tagged: gold