Concern over the long term sustainability of free cash flow took the shine off an otherwise strong quarterly earnings report from Kirkland Lake Gold Inc., one of Canada’s best performing gold stocks.
On Wednesday, PI Financial Corp. analyst Phil Ker cut his rating to neutral from buy, on fears that hefty capital expenditure requirements at the intermediate mining company over the next few years could hinder free cash flow.
In the first quarter, Kirkland Lake beat estimates, reporting adjusted earnings per share of 25 cents, a penny better than consensus. On a net basis, the company posted a profit of $53.8-million, compared with $13.1-million in the same quarter in 2017. The miner also boosted its quarterly dividend to 3 cents a share from 2 cents, with free cash flow rising 30 per cent year-over-year to $50.2-million. Continue Reading →