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AP News

Kinross Gold's shares higher on 3Q earnings

NEW YORK (AP) — Shares of Kinross Gold Corp. rose Thursday after the Canadian gold producer said its third-quarter net income improved as it sold more gold at higher prices.

THE SPARK: The Toronto mining company said Wednesday that its net income was $224.9 million, or 20 cents per share, in the July-through-September quarter. That compared with net income of $207.1 million, or 19 cents a share in the year-ago quarter.

Revenue rose to $1.11 billion from $1.04 billion.

The most recent results reflected a number of one-time items, including a $7.1 million loss on derivatives and $16.4 million in severance expenses. Excluding those, Kinross' adjusted earnings were $250.4 million, or 22 cents per share.

Analysts, on average, predicted an adjusted profit of 19 cents per share on revenue of $1.1 billion, according to FactSet.

Kinross produced more gold but production costs also were higher. Its average realized price for gold was $1,649 per ounce, compared with $1,644 per ounce in the year-ago quarter.

Kinross expects 2012 production to be at the higher end of its forecast, which ranges from 2.5 million to 2.6 million gold equivalent ounces from its continuing operations. It reduced its full-year forecast for capital expenditures to about $2 billion, compared with the previous forecast of $2.2 billion.

THE ANALYSIS: BMO Capital Markets analyst David Haughton has rated Kinross at "Outperform" because of its value and growth but told clients in a research note that the company needs time to execute its strategies.

THE SHARES: Shares of Kinross rose 68 cents, or 7 percent, to $10.07 in afternoon trading. The stock is still down about 12 percent for 2012.

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