Why AuRico Gold (AUQ) Is Down Today

NEW YORK (TheStreet) -- AuRico Gold (AUQ) was falling 4.9% to $4.74 Tuesday after missing analysts' estimates for earnings and revenue in the fourth quarter.

The gold producer posted a loss of 2 cents a share for the fourth quarter, while analysts expected it to break even. Revenue fell 19.5% from the year-ago quarter to $50.8 million, missing the Capital IQ Consensus Estimate of $63.75 million for the quarter.

AuRico Gold produced 49,526 gold ounces in the fourth quarter with cash costs of $771 per gold ounce.

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TheStreet Ratings team rates AURICO GOLD INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate AURICO GOLD INC (AUQ) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • AURICO GOLD INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, AURICO GOLD INC swung to a loss, reporting -$0.44 versus $0.04 in the prior year.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 57.0% when compared to the same quarter one year ago, falling from $34.54 million to $14.86 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, AURICO GOLD INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The share price of AURICO GOLD INC has not done very well: it is down 23.33% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The gross profit margin for AURICO GOLD INC is rather high; currently it is at 60.93%. Regardless of AUQ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AUQ's net profit margin of 27.36% compares favorably to the industry average.
  • You can view the full analysis from the report here: AUQ Ratings Report

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