Analyzing Gold Miners’ Beats and Misses for 1Q17
Barrick Gold misses
Of the four senior miners (RING) (GDX) we’re covering in this series, only Barrick Gold (ABX) missed market expectations for its 1Q17 results. It reported its results after the market closed on April 24, 2017, with adjusted EPS (earnings per share) of $0.14, which was lower than the consensus estimate of $0.20.
Although ABX’s revenues rose 3.0% YoY (year-over-year) to ~$2.0 billion in 1Q17, it missed analysts’ estimate by 8.3%. The company also revised its production estimate downward for 2017 to 5.3 million–5.6 million gold ounces from its previous estimate of 5.6 million–5.9 million gold ounces. The company mentioned that approximately two-thirds of this reduction stemmed from its anticipated sale of a 50.0% stake in the Veladero mine. Read Why Some Are Looking Past Barrick Gold’s 1Q17 Miss to find out why the miss might not be too bad for its future outlook.
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Other gold miners beat expectations
Newmont Mining (NEM), which also reported its 1Q17 results on April 24, 2017, slightly beat consensus expectations. It reported adjusted EPS of $0.25 compared to the consensus estimate of $0.23. However, NEM slightly missed the consensus revenue estimate of $1.73 billion, delivering a top line of $1.66 billion.
Newmont Mining’s earnings beat was mainly due to the company’s higher-than-expected production. The company even raised its long-term production forecast and lowered its cost guidance. Read Is Newmont Mining Finally on Track after 1Q17? for more details.
In its 1Q17 results, which were reported on April 26, 2017, Goldcorp (GG) reported EPS of $0.20, which was higher than analysts’ expectation of $0.09. The beat was mainly due to lower-than-expected costs. Although the company beat the earnings estimate, its stock fell 4.7% on April 27, 2017. Investors were probably concerned about the company’s steep production fall during the quarter.
Read Why Goldcorp Dulled despite Beating Estimates in 1Q17 for more information.
Kinross stock surged after the beat
Kinross Gold (KGC) reported its 1Q17 results on May 2, 2017. It beat earnings expectations with adjusted EPS of $0.02 compared to the analyst consensus of $0.01. Its revenues also beat market expectations by 2.0%, coming in at $796.0 million. Kinross Gold stock rose more than 10.0% on May 3, 2017.
You can read Is Kinross Gold Getting a Double Take after Its 1Q17 Results? to see the results and outlook in more detail.