Goldcorp keeps shining

The gold mining company meets profit estimates, but surprises Wall Street on revenue.

By Jim J. Jubak Mar 12, 2010 3:54PM

Jim JubakAfter the market's close Thursday, Goldcorp (GG) reported fourth-quarter earnings of 25 cents a share (excluding one-time items).


That was in line with the Wall Street consensus. Revenue climbed by 27.8% to $778 million -- substantially above analysts' $732-million estimate. For the quarter, Goldcorp reported production of 601,300 ounces of gold.


The news was good enough that investors can pardon chief executive officer Chuck Jeannes if he sounded like he was crowing. 


“Achieving record gold production at the lowest cash costs of any major gold mining company while increasing gold reserves for a sixth consecutive year made 2009 a very successful year for Goldcorp,” he said in his company's press release.


“In addition," he added, "we brought one of our cornerstone mines, Penasquito, into operational production on time and on budget and repositioned another, the prolific Red Lake mine, for long-term success. With Pueblo Viejo advancing on time toward first gold production in late 2011, the three major drivers of our five-year, 57% growth profile remain well on track.”


Even the cost story was positive. (For why cost is a reason to buy Goldcorp, see my original buy on this stock in Jubak's Picks).


For the full year, the company produced 2.42 million ounces of gold at total cash cost of $295 an ounce. That compares to a total cash cost of $305 per gold ounce in 2008. 


In calculating cash cost, the value of by-products (in this case copper and silver) are deducted from the costs of producing the gold. In 2009, Goldcorp's cash cost fell because of higher prices for copper and silver.


As of March 12, I'm going to raise my target price to $50 a share by December from the previous target of $48 by October 2010. (It traded above $39 Friday afternoon.)


At the time of this writing, Jim Jubak owned shares of Goldcorp in his personal portfolio. 

Tags: gold
0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

116
116 rated 1
284
284 rated 2
461
461 rated 3
671
671 rated 4
628
628 rated 5
618
618 rated 6
615
615 rated 7
495
495 rated 8
347
347 rated 9
115
115 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
DYNDYNEGY Inc10
TAT&T Inc9
VZVERIZON COMMUNICATIONS9
EXCEXELON CORPORATION8
AAPLAPPLE Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.