Goldcorp Drops After Earnings Trail Estimates on Costs

Goldcorp Inc., the biggest producer of the metal by market value, dropped the most in almost six years after reporting higher third-quarter costs and lower-than-expected output.

Goldcorp fell 13 percent to C$20.85 at 4 p.m. in Toronto, the biggest decline since Dec. 1, 2008. The shares have tumbled 9.5 percent this year.

The third-quarter net loss was $44 million, which compared to net income of $5 million a year earlier, Vancouver-based Goldcorp said today in a statement. Earnings excluding one-time items were 9 cents a share, trailing the 18-cent average of 21 estimates compiled by Bloomberg. Sales fell 4 percent to $859 million, missing the $967.8 million average estimate.

The miner is among producers working to reduce costs after the metal’s 28 percent drop last year. Gold futures averaged $1,282.12 an ounce in the third quarter on the Comex in New York, 3.4 percent lower than a year earlier.

Gold added to losses today, falling 2.1 percent to settle at $1,198.60 an ounce in New York.

Goldcorp’s average so-called all-in sustaining cost was $1,066 an ounce, compared with $995 a year earlier and the $895 average of three estimates.

The company wrote down the value of a low-grade ore stockpile at its Penasquito mine in Mexico, following a change to the mine plan, which increased average costs by $64 an ounce. The change also negatively affected earnings by 4 cents a share, Goldcorp said.

Gold Output

Third-quarter gold output rose to 651,700 ounces from 637,100 a year earlier. Ten analysts estimated on average 719,700 ounces.

Goldcorp said today that 2014 gold output will be at the low end of its forecast range of 2.95 million to 3.1 million ounces.

Barrick Gold Corp., the world’s largest gold producer, yesterday reported third-quarter profit excluding one-time items that beat analysts’ estimates, after the Toronto-based miner’s costs were lower than expected. Barrick also reduced its cost forecast range for the year.

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