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Which Gold Miners Can Beat Their Revenue Estimates for 3Q17 and Beyond?

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Oct. 20 2017, Updated 9:39 a.m. ET

Analysts’ forecasts

Analysts forecasts for gold miners’ (GDX) revenues can give us a good idea about their views on gold prices (GLD) and companies’ production growth going forward. In this part of the series, we’ll assess analysts’ revenue expectations for gold companies in 3Q17 and beyond.

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Analysts’ revenue expectations

Wall Street analysts expect Barrick Gold (ABX) to generate revenues of ~$2.1 billion for 3Q17. This trend implies a decline of 4.0% compared to its actual revenues in 2Q17 and its 9.7% decline year-over-year (or YoY). This trend is in line with the company’s pre-released production results, which were 11.4% lower YoY and 13.4% lower sequentially.

Newmont Mining (NEM) is expected to generate revenues of ~$1.9 billion in 3Q17. This is a slight sequential decline of 0.2% and growth of 4.5% YoY. 

NEM’s 2017 revenue estimate also implies growth of 8.5%. This estimate is mostly due to the new production growth from the start of Merian and Long Canyon.

While analysts’ estimates imply a sequential increase of 3.2% for Goldcorp’s (GG) 3Q17 revenues, it has an implied year-over-year decline of 7.3%. The company’s production is expected to fall in 2017 due to lower near-term grades.

Kinross Gold and Agnico Eagle

According to consensus estimates, Kinross Gold’s (KGC) revenues are expected to fall 12% quarter-over-quarter and 16% YoY in 3Q17 to $764 million. Estimates also imply a YoY fall of 5.1% in revenues for 2017. 

The expected declines are in line with KGC’s guided production, which is 7.1% lower in 2017 compared to 2016 at the midpoint.

The revenue estimates for Agnico Eagle Mines (AEM) also imply a decline of 11.5% YoY to $540 million.

In the next article, we’ll discuss the earnings drivers for these companies.

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