Monday, February 8, 2010

Gold Fields (NYSE:GFI) Profits Up 44 Percent

Gold Fields (NYSE:GFI) Profits Up 44 Percent

We are about to get a bunch of earnings reports in the days ahead for gold mining companies, and starting things off was Gold Fields Limited (NYSE:GFI), which enjoyed profit growth for the latest quarter of 44 percent, or $187 million.

That's an increase of 44 percent over the third-quarter results and 146 percent over the fourth quarter of 2008.

Most of that profit growth for Gold Fields was because of the continuing spike in gold prices.

The company would have performed better had it better managed the mining safety delays experienced in the last quarter which brought gold production down to 900,000 ounces, in contrast to the 906,000 ounces of gold produced in the previous quarter.

South African gold production continues to be a concern with the company saying they are expecting only 850,000 ounces of gold in the first quarter of 2010 as a result.

Other concerns putting downwards pressure on the share price of Gold Fields Limited are the possibility of gold mines in South Africa being nationalized, possibilities of a lower price for gold, and why the company is offering a dividend of only 50 cents a share.

Gold Fields continues to be an unpredictable performer because of its strong presence in South Africa, and because of the high leverage associated with that, the company performs stronger when the price of gold goes up in contrast to many of its competitors, but also takes a bigger hit than its competitors when the price of gold goes down.

Gold Fields (NYSE:GFI) Profits Up 44 Percent

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