UPDATE 2-Goldcorp profit jumps; production outlook trimmed

Wed Jul 27, 2011 7:48pm EDT

* Q2 adjusted EPS $0.52 vs $0.27 a year earlier

* Company trims mid-point of 2011 output range by 6.5 pct

* Company to focus on ramp-up at Penasquito mine (Adds details on estimates, outlook; figures in U.S. dollars, unless noted)

By Euan Rocha

TORONTO, July 27 (Reuters) - Goldcorp Inc (G.TO) said on Wednesday its second-quarter operating profit more than doubled, as a surge in bullion prices and increased output helped boost the Canadian miner's results.

But the company cut the mid-point of its expected 2011 gold production range by 6.5 percent, as operational issues, project delays and forest fires curtailed operations in Mexico, Canada and the Dominican Republic.

The company, which owns mines spread across the Americas, said earnings excluding one-time items in the quarter ended June 30 rose to $420 million, or 52 cents a share, from $199 million, or 27 cents, a year earlier.

The quarterly earnings were in-line with analysts' average forecast, according to Thomson Reuters I/B/E/S.

Quarterly revenue rose more than 60 percent to $1.32 billion, driven by gains in both production and pricing.

Gold sales rose to 606,400 ounces on production of 597,100 ounces, compared with sales of 577,500 ounces a year earlier on production of 588,600 ounces.

Average realized gold price was $1,516 per ounce, up about 25 percent from a year ago.

Including one-time gains and other items, net income dropped to $489 million, down from earnings of $524 million.

OUTLOOK TRIMMED

Goldcorp. which is currently in the process of ramping up output from its Penasquito gold-silver mine in Mexico, said it has been forced to trim its 2011 production outlook, partly because due to operational issues and restricted cyanide supplies there.

"We expect to resolve both issues by the end of 2011 and Penasquito production in 2012 and beyond is not expected to be impacted by these issues," said Chief Executive Chuck Jeannes, in a statement.

The company, which had also expected about 50,000 ounces of gold from its Pueblo Viejo project in the Dominican Republic later this year, now sees no production from the operation until mid-2012.

Goldcorp owns a minority interest in Pueblo Viejo, which is operated by Barrick Gold (ABX.TO), the world's largest gold producer. In May, Barrick warned that heavy rainfall had damaged the tailings facility it is building at the site.

The companies now expect capital costs on the project to increase nearly 10 percent above earlier projections to between $3.6 billion and $3.8 billion, Goldcorp said in its statement.

Goldcorp expects that its share of the mine's annual gold production will average between 415,000 and 450,000 ounces, over the first full five years of operation.

Goldcorp also warned that it expects a 20,000 ounce shortfall in gold output from its Musselwhite mine in Ontario, after forest fires forced the company to halt production earlier this month. The mine is expected to be back to regular operation in a few days.

The company now expects 2011 gold production of between 2.5 million and 2.55 million ounces, down from a prior forecast of between 2.65 million and 2.75 million ounces.

Goldcorp expects to complete an updated feasibility study on its El Morro project in Chile later in the current quarter. (Reporting by Euan Rocha; editing by Frank McGurty and Andre Grenon)