From Zacks: A few major gold mining companies are lined up to report their quarterly results on Feb 15.
The gold mining industry falls under the broader Basic Materials sector. Based on the earnings scorecard as of Feb 10, 75% of the sector participants on the S&P 500 index have already reported their quarterly numbers. Earnings for these companies increased 7.3% from the same period last year while revenues have increased by a paltry 0.1%, per the latest Earnings Preview. Overall earnings for the Basic Materials sector are now projected to rise 5.3% while revenues are expected to slip 3.2%.
Gold enjoyed a solid run during the first half of 2016 with prices surging as much 25%, spurred by Brexit-induced market volatility, the U.S. Federal Reserve’s dovish stance and concerns over the global economy. However, the yellow metal lost its momentum toward the year-end with prices retreating in the last two months of 2016 following President Trump’s election win and the Fed’s interest rate hike. Gold’s decline was also triggered by a surge in the U.S. dollar.
Nevertheless, gold regained some lost ground of late with prices breaking above the $1,200 an ounce threshold, helped by a decline in U.S. equities on uncertainties surrounding Trump’s polices. The prices of the metal are up around 6.5% so far this year.
The prospects of a more-hawkish stance from the Fed this year is likely to remain a major source of headwind for gold in the near term. Trump’s proposed tax cuts, deregulation and fiscal stimulus are likely to spur economic activity and trigger a rise in inflation, which could prompt the central bank to increase rates further in 2017.
Let’s take a peek into four gold mining companies that are slated to report fourth-quarter results on Feb 15.
Barrick Gold Corporation (ABX – Free Report) will report its results after the bell. The company not only carries an unimpressive Zacks Rank #4 (Sell), it also has an Earnings ESP of -9.52%, making an earnings beat unlikely. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Barrick beat estimates in three of the trailing four quarters while reported in line on the other occasion. In this timeframe, it delivered an average positive surprise of 12.65%.
Barrick Gold Corporation Price and EPS Surprise
Kinross Gold Corporation (KGC – Free Report) will report after market close. The company has an Earnings ESP of -66.67% as the Most Accurate estimate stands at a penny per share while the Zacks Consensus Estimate is pegged at 3 cents. The stock carries a favorable Zacks Rank #3 (Hold), but its negative ESP makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company beat estimates in two of the trailing four quarters while missed in the other two. The average negative surprise is 5%.
Kinross Gold Corporation Price and EPS Surprise
Goldcorp Inc. (GG – Free Report) will report its financial results after the bell. The company has an Earnings ESP of -11.11% and a Zacks Rank #5 (Strong Sell), making it difficult to predict an earnings beat. Goldcorp missed estimates in three of the trailing four quarters while it beat once. The average negative surprise is 152.08%.
Agnico Eagle Mines Limited (AEM – Free Report) will report after the close. The company has an Earnings ESP of -42.86% as the Most Accurate estimate stands at 8 cents while the Zacks Consensus Estimate is pegged at 14 cents. The stock carries a Zacks Rank #3, but its negative ESP makes surprise prediction difficult.
The company beat estimates in each of the trailing four quarters, delivering an average positive surprise of 83.66%.
Agnico Eagle Mines Limited Price and EPS Surprise
The VanEck Vectors Gold Miners ETF (NYSE:GDX) was trading at $24.92 per share on Tuesday morning, down $0.03 (-0.12%). Year-to-date, GDX has gained 19.12%, versus a 4.03% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Zacks Research.