NEW YORK (TheStreet) -- Shares of Eldorado Gold (EGO - Get Report) are plummeting, sharply down 20.82% to $6.16 in mid-morning trading on Wednesday, after the mining company was downgraded by analysts at Credit Suisse and TD Securities this morning following a disappointing 2015 outlook along with its 2014 operating results.
Eldorado Gold reported record gold production in 2014 totaling 789,000 ounces and cash operating costs averaging $500 per ounce. But, the mining company expects 2015 production to decline to a range of between 640,000 - 700,000 ounces with cash costs of between $570 to $615 per ounce.
Credit Suisse downgraded Eldorado Gold to "neutral" from "outperform," while TD Securities lowered its rating on shares to "hold" from "buy," saying the company's solid finish to 2014 is overshadowed by the weak 2015 outlook.
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Canada-based Eldorado Gold is an exploration-stage, a discovery-stage, a development-stage, a production-stage and a reclamation-stage mining company with its primary focus on gold, iron ore and silver-lead-zinc mines.
Separately, TheStreet Ratings team rates ELDORADO GOLD CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate ELDORADO GOLD CORP (EGO) a SELL. This is driven by several 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 weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ELDORADO GOLD CORP's earnings per share declined by 40.0% in the most recent quarter compared to the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, ELDORADO GOLD CORP swung to a loss, reporting -$0.91 versus $0.45 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 45.6% when compared to the same quarter one year ago, falling from $36.41 million to $19.79 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 on the basis of return on equity, ELDORADO GOLD CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Net operating cash flow has decreased to $92.19 million or 23.34% when compared to the same quarter last year. Despite a decrease in cash flow of 23.34%, ELDORADO GOLD CORP is in line with the industry average cash flow growth rate of -29.07%.
- EGO, with its decline in revenue, underperformed when compared the industry average of 4.5%. Since the same quarter one year prior, revenues slightly dropped by 8.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: EGO Ratings Report