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Gold Mining Q2 Earnings Mostly Upbeat: ETFs in Focus

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Gold miners remained one of the biggest coronavirus beneficiaries as VanEck Vectors Gold Miners ETF (GDX - Free Report) added about 19.2% in the past three months (as of Aug 13, 2020). In comparison, gold bullion ETF (GLD - Free Report) advanced about 10.8%. The space comes from a favorable Zacks industry (placed at the top 30% of total 250+ industries in the Zacks universe).

The Fed’s super-dovish stance since March and the resultant moderate strength in the greenback, lower oil prices, cheaper valuation and relatively low debt of mining companies facilitated this spectacular performance (read: 5 Reasons Why Gold Mining ETFs & Stocks Have More Room to Run).

Gold mining companies are better positioned than they’ve been in 10-20 years with low operating costs, healthy balance sheets, and attractive valuations, as per investment management firm VanEck.

Against this scenario, let’s take a look at how gold mining stocks have performed so far this reporting season (read: Silver ETFs or Gold: Which Metal to Shine More Ahead?).

Inside Earnings Releases

Barrick Gold Corporation (GOLD - Free Report) recorded net earnings (on a reported basis) of $357 million or 20 cents per share in second-quarter 2020, up from $194 million or 11 cents in the year-ago quarter. Barring one-time items, adjusted earnings per share increased 155.6% year over year to 23 cents. The figure also beat the Zacks Consensus Estimate of 19 cents. Barrick recorded total sales of $3,055 million, up 48.1% year over year. The figure topped the Zacks Consensus Estimate of $2,656.5 million.

Wheaton Precious Metals Corp. (WPM - Free Report) reported adjusted earnings of 22 cents per share in second-quarter 2020, beating the Zacks Consensus Estimate of 19 cents. The bottom-line figure also surged 131% year over year. The company generated revenues of $248 million in the reported quarter, up 31% on a year-over-year basis. Also, the top line outpaced the Zacks Consensus Estimate of $208 million.

Kinross Gold Corporation (KGC - Free Report) logged a profit of $18.6 million or 16 cents per share in second-quarter 2020, down from $29.5 million or 25 cents per share in the year-ago quarter. Earnings, however, beat the Zacks Consensus Estimate of 4 cents. Net sales fell 20% year over year to $386 million, hurt by lower sales volumes and lower average TiO2 selling prices. However, the figure beat the Zacks Consensus Estimate of $369.9 million.

Newmont Corporation (NEM - Free Report) reported net income from continuing operations of $412 million or 51 cents per share in second-quarter 2020, up from $1 million or breakeven per share in the year-ago quarter. Barring one-time items, adjusted earnings were 32 cents per share that missed the Zacks Consensus Estimate of 34 cents. Newmont reported revenues of $2,365 million, up 4.8% year over year. However, the figure missed the Zacks Consensus Estimate of $2,368.4 million.

ETFs in Focus

All the stocks mentioned above have a considerable focus on VanEck Vectors Gold Miners ETF. Investors can also bet on other gold mining ETFs like iShares MSCI Global Gold Miners ETF (RING - Free Report) , Sprott Gold Miners ETF (SGDM - Free Report) and US Global Go Gold and Precious Metal Miners ETF (GOAU - Free Report) to gain access to the aforementioned stocks.

Though the price of the gold bullion has been a bit volatile lately, gold mining companies have been experiencing more gains than their bullion counterparts in a rising metal market since they act as a leveraged play on the underlying metal prices.

Additionally, better-than-expected earnings releases from most gold mining companies added to the strength. These factors along with still-lower oil prices, which make up a significant portion of a miner’s costs, could help mining stocks ahead  (read: Which Gold ETF is Better, GLD or GDX?).

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