Which Gold Miners Could Surprise on the Earnings Upside in Q4?



Earnings estimates

In this article, we’ll discuss what analysts expect for gold miners’ (RING) earnings in the fourth quarter of 2018. In line with their lower revenue estimate for Barrick Gold (GOLD), analysts expect the company’s EBITDA to fall.

At 27% YoY (year-over-year), the expected fall in Barrick’s EBITDA is more severe than the 12% expected fall in its revenue, mainly due to lower production and higher expected costs. Barrick expects its all-in sustaining costs in 2018 to be $765–$815 per ounce compared to $710–$770 per ounce in 2017.

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Kinross Gold and Newmont Mining

In line with their lower revenue estimate, analysts expect Kinross Gold’s (KGC) EBITDA to fall in the fourth quarter, amounting to a drop of 28% YoY. For 2018, analysts expect KGC’s EBITDA to be $1.04 billion, implying a potential rise of 6.7% compared to 2017. The company’s production costs have fallen, boosting its margins. In 2018, analysts expect its margins to expand to 34.0% from 32.8% in 2017.

In line with their expectations for its revenue, analysts expect Newmont Mining’s (NEM) fourth-quarter EBITDA to fall 3% YoY in 2018. For 2018, they expect its EBITDA to fall 4.0%. Newmont Mining expects its production to fall and its costs to rise between 2017 and 2018, driving its EBITDA lower by more than the fall in its revenue.

Agnico Eagle, Goldcorp, and Yamana Gold

Analysts expect Agnico Eagle Mines’ (AEM) EBITDA to fall 18% YoY in 2018. Like its revenue, the company’s profitability is expected to start climbing in 2019.

Analysts expect Goldcorp (GG) to achieve EBITDA of $333.0 million in the fourth quarter and $1.24 billion in 2018. Their fourth-quarter and 2018 estimates imply falls of 12.0% and 16% YoY, respectively, for the company.

Analysts expect Yamana Gold (AUY) to see EBITDA of $200.0 million in the fourth quarter, implying a potential rise of 20%. The startup of its Cerro Moro mine is the main driver of this significant increase. Its 2018 EBITDA still implies a fall of 3%. For 2019 and 2020, however, analysts expect it to see growth of 18% and 14.6%, respectively, supported mainly by Cerro Moro’s ramp-up.


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