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Did Gold Miners’ Q4 Results Meet Expectations?

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Earnings season

During the fourth-quarter earnings season, there weren’t many clear earnings beats among gold miners (RING) (GDX). Out of the miners we are discussing in this series, only Newmont Mining (NEM) beat analysts’ earnings expectations thoroughly on both the top line and bottom line. Kinross Gold (KGC) also beat the consensus expectations on both counts. However, depending on guidance and other factors, stock reactions to the companies’ earnings beats and misses varied among miners.

In this part, we’ll look at the major reasons for miners’ earnings beats and misses. We’ll also then try to segregate factors that are more fundamental in nature and which could be transitory.

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GOLD and NEM: Stock price reactions

Barrick Gold (GOLD) opened the earnings season for gold miners with earnings on February 13 after the markets closed. It reported an adjusted EPS of $0.06 in the fourth quarter, which beat the consensus estimate of $0.05. The company, however, missed the top-line estimates by ~$60 million and reported revenues of $1.9 billion for the fourth quarter. The stock had a muted reaction and just gained 0.7% on February 14 in comparison to the VanEck Vectors Gold Miners ETF’s (GDX) gain of 1.0% the same day.

Newmont released its earnings results on February 21 (before the market opened). It reported EPS of $0.40, which beat the consensus estimate by $0.16. The company’s revenues of $2.05 billion also beat the estimate by 9.0%. Its stock, however, was mostly flat in comparison to -1.63% returns from GDX.

For more details on these companies’ results, read Barrick Gold after the Randgold Merger: Upside in 2019? and Can Newmont Mining Outperform Its Peers in 2019?

GG and KGC

Goldcorp (GG) reported its fourth-quarter earnings results after the market closed on February 12. It reported adjusted EPS of $0.07, which beat the consensus estimate by $0.04. Its revenues of $772.0 million, however, missed the analyst estimate by ~7.4%.

This beat came after three consecutive quarters of disappointing results and missed expectations. The stock closed with a gain of just 0.4%. See Newmont-Goldcorp Merger: What to Expect from Combined Company for more details.

Kinross Gold (KGC) released its results after the markets closed on February 13. It reported adjusted EPS of $0.01, which beat the consensus estimate by $0.01. Its revenue of $786 million also beat analysts’ expectations by 3.3%.

Kinross stock closed 1.6% higher after its conference call on February 14. Read Can Kinross Gold Stock Rise above Its Issues in 2019? to learn more about the company’s results and outlook.

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