Monday, November 3, 2008

One-time item boosts Goldcorp's profit to $297M US

One-time item boosts Goldcorp's profit to $297M USThree-month TSX trading for Goldcorp

A revaluation of future tax liabilities almost quadrupled Goldcorp Inc.'s third-quarter profit to $297.2 million US from $75.8 million in the same period last year, the company reported Friday.

The revaluation resulted in a non-cash, foreign-exchange gain of $240.2 million for the quarter ended Sept. 30. All figures are in U.S. dollars.

Without that gain, earnings adjusted for one-time items were $64.7 million, or nine cents per share, compared with adjusted earnings of $82.3 million, or 12 cents a share, a year earlier.

The average forecast by analysts surveyed by Thomson Financial was for per-share earnings of 14 cents.

The international miner, which is based in Vancouver, said a realized gold price of $865 an ounce led to a revenue increase of $28.2 million, or five per cent, to $552.2 million.

Operating cash flow increased 14 per cent to $237.3 million, although earnings from operations sagged to $99.4 million from $155.4 million.

Mine operating costs swelled to $279.1 million from $218.2 million and there were hefty increases in corporate administration costs, depreciation and depletion.

Production for the quarter was 557,400 ounces of gold at cash costs of $346 an ounce, compared with 524,000 ounces at $160 per ounce for the same period last year.

Goldcorp attributed the increase in cash costs to higher energy, labour and other operational costs as well as power interruptions at its Marlin mine in Guatemala.

"Lower byproduct credits for silver and copper also contributed to the higher cash costs," it said.

Goldcorp, which remains debt-free, ended the quarter with $454 million in cash and equivalents, and confirmed its 2008 production and cost guidance of 2.3 million to 2.4 million ounces at a cash cost of under $300 an ounce.

"We are pleased with our solid performance in the third quarter as well as our continued strong cash position," CEO Kevin McArthur said in a release. "We remain well positioned to execute our growth programs."

"Given market uncertainty and the metals price environment, we will continue to be disciplined in our use of capital, with an emphasis on successful completion of our cornerstone Penasquito project [in Mexico]," he said.

Shares of Goldcorp closed down $1.98, or more than eight per cent, at $22.54 on the TSX.

With files from the Canadian Press

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