Dominion Diamond (DDC) Tops Q2 EPS by 16c on Revenues of $239.8M; Boosts FY18 Sales Guidance

Dominion Diamond (NYSE: DDC) reported Q2 EPS of $0.39, $0.16 better than the analyst estimate of $0.23. Revenue for the quarter came in at $239.8 million, versus $0 reported last year.

Sales are expected to be between $895 million and $955 million with strong sales experienced in the first half of the year continuing throughout the remainder of fiscal 2018. Previous guidance for sales for fiscal 2018 was between $875 million and $975 million. Sales are expected to continue to benefit from a return in demand for the commercial and cheaper ranges of goods experienced in the first half of fiscal 2018 as well as ongoing sales of fancy coloured diamonds recovered from the Ekati mine. These positive developments have been offset by a downward revision of the estimated average value per carat for diamonds recovered from Koala underground. This reduction in average value per carat results in a corresponding reduction in estimated sales in the remainder of fiscal 2018. In line with the improvement in demand for smaller and brown goods experienced in the first half of fiscal 2018, the volume of sales in these segments is expected to be higher than originally planned, with a corresponding reduction in the expected average price per carat sold for both Ekati and Diavik mines.

Adjusted EBITDA is expected to be between $465 million and $515 million, compared to the original guidance of between $475 million and $560 million. Guidance for Adjusted EBITDA for the Ekati segment has been reduced by a downward revision of the estimated value per carat for Koala underground, influencing both gross margin and Adjusted EBITDA in that segment. For the Diavik segment, the guidance range for Adjusted EBITDA has been tightened. Guidance ranges reflect continued strong cost controls at both the Ekati and Diavik mines.

GUIDANCE:

Dominion Diamond sees Q3 2018 revenue of $895-955 billion, versus the consensus of $935.95 billion.

For earnings history and earnings-related data on Dominion Diamond (DDC) click here.

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