AngloGold Ashanti (AU), the South African mining concern, saw production decline in its first quarter after accidents that killed two workers forced a three-day shut down of its entire South African division.
Though the company led its first-quarter earnings release with assurances that safety has improved, four workers have already died in the company's second quarter.
"Safety remains the company's top priority," AngloGold said in a statement, "and operational management continued to make good progress on all fronts during the past year, recording the lowest ever number of lost-time injuries and a 58% decline in the fatality injury frequency rate. Regrettably, the second quarter thus far has been disappointing with four fatalities."
In other news, the company profited from its decision a year ago, along with the rest of the industry, to reduce its hedge book -- in which it takes short positions with forward sales contracts. As gold prices have increased -- up 14% in the quarter from a year ago -- those hedges would have lost money, cutting into the company's profit margins.As it stands, AngloGold said, it turned in adjusted earnings of $150 million, or 42 cents a share. A year ago, the company was in the red, losing 17 million, or 5 cents a share. The company cut its hedge positions to 5.84 million ounces of gold, down 50% from a year ago. Gold production fell 13% to 1.1 million ounces compared with the year-ago period. AngloGold blamed the falloff on the shutdowns for safety after the deadly accidents and to do maintenance work.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV