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Goldcorp Earnings Trail Estimates as Output Disappoints

May 2 (Bloomberg) -- Goldcorp Inc., the world’s biggest producer of the metal by market value, reported first-quarter profit and revenue that missed analysts’ estimates after mining costs increased and output rose less than expected.

Earnings excluding a foreign-exchange gain and other one-time items were 31 cents, the Vancouver-based company said today in a statement. That trailed the 38-cent average of 21 estimates compiled by Bloomberg.

Sales fell to $1.02 billion from $1.21 billion a year earlier, less than the $1.35 billion average of eight estimates.

Goldcorp, led by Chief Executive Officer Chuck Jeannes, is seeking to curb rising costs to boost profit margins after gold prices slumped 12 percent this year. The company has reviewed its spending, cost and exploration plans following the market volatility, Jeannes said in the statement.

“A contingency plan is now in place that would defer spending should market conditions warrant,” he said. The company has sufficient cash flow and liquidity to weather “any conceivable metals price environment.”

Goldcorp fell 0.6 percent to C$28.91 at the close in Toronto. The shares have declined 21 percent this year.

First-quarter net income slid 35 percent to $309 million, or 33 cents a share, from $479 million, or 51 cents, a year earlier. Goldcorp produced 614,600 ounces of gold in the period, up from 524,700 ounces. The average of five estimates was for 624,600 ounces. Gold sales climbed to 595,100 ounces from 545,700 ounces.

Penasquito Decline

Output at the Penasquito mine fell more than expected compared with the fourth quarter, said Brian Yu, a San Francisco-based analyst at Citigroup Inc. That also affected the mine’s silver, lead and zinc byproduct, he said today in a note.

Penasquito produced 60,100 ounces of gold, down from 112,900 ounces in the preceding three months. Mining in the first half is taking place in a lower-grade portion of the project, Goldcorp said. Grades should improve “significantly” in the second half, Yu said.

The company’s so-called byproduct cash cost to produce and sell gold more than doubled to $565 an ounce. That exceeded the $529 average of five estimates compiled by Bloomberg. The measure includes revenue from metals other than gold that are used to offset gold-production expenses.

Goldcorp reiterated a Feb. 28 forecast of 2.55 million to 2.8 million ounces of gold output in 2013 at a byproduct cost of $525 to $575 per ounce. Capital spending is seen at $2.8 billion.

Bear Market

Gold, which has risen for 12 consecutive years, fell into a bear market April 12 after dropping more than 20 percent from a record closing price of $1,891.90 an ounce in August 2011. The metal reached a two-year intraday low of $1,321.50 on April 16, a day after plunging the most in three decades.

Gold averaged $1,631.98 in the first quarter, 3.7 percent less than a year earlier and 5.1 percent lower than in the three months ended Dec. 31.

Goldcorp. is Canada’s second-biggest gold miner by sales. It overtook Toronto-based Barrick Gold Corp. last month to become the most valuable company in the industry, despite producing less than half the metal.

To contact the reporter on this story: Liezel Hill in Toronto at lhill30@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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