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Galiano Gold (GAU) to Report Q3 Earnings: What to Expect?

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Galiano Gold Inc. (GAU - Free Report) is expected to release third-quarter 2020 results on Nov 6, before the opening bell.

Q3 Estimates

The Zacks Consensus Estimate for third-quarter earnings per share is currently pegged at 4 cents. The company had reported break-even earnings per share in the prior-year quarter. The estimate has moved up 33% over the past 30 days.

Q2 Results

In the last reported quarter, Galiano Gold delivered year-over-year improvement in both earnings and revenues. The company also surpassed the Zacks Consensus Estimate for earnings in the quarter. Notably, the company beat estimates in two of the the trailing four quarters and missed the same twice. It has a trailing four-quarter earnings surprise of 125%, on average.

Factors to Note

Galiano Gold currently operates and manages the Asanko Gold Mine, located in Ghana, West Africa, which it jointly owns with Gold Fields Limited (GFI - Free Report) . The company had earlier announced that with the Nkran Cut 2 depleted, ore will be sourced from the lower grade Esaase Main and Akwasiso pits. Consequently, production in the third quarter might have been negatively impacted and come in lower than the record production in the second quarter. This was primarily because of the lower grade from both pits as the Asanko Gold Mine transitions to Akwasiso as its primary fresh ore source.

Apprehensions regarding the impact of the coronavirus pandemic on the global economy, uncertainty over the U.S presidential election and the protracted U.S-China trade tiff have led to a rally of 26% in gold prices so far this year. In fact, gold had peaked to an all-time high of $2074.88 an ounce in August. Thus, higher gold prices may have offset the impact of lower production on the company’s third-quarter performance.

However, costs are expected to be higher in the third quarter as ramped up sustaining capital expenditures associated with the raise of the tailings storage facility and stripping costs at Esaase Main and Akwasiso.This is likely to have reflected in the company’s to-be-reported quarter’s results.

Price Performance

The stock gained 45.3% year to date compared with the industry’s rally of 32.2%.

What the Zacks Model Says

Our proven model doesn’t conclusively predict an earnings beat for Galiano Gold this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: The Earnings ESP for Galiano Gold is -14.29%.

Zacks Rank: Galiano Gold currently carries a Zacks Rank #3.

Stocks Likely to Beat Estimates

Here are some companies in the basic materials space you may want to consider as our model shows that these have the right combination of elements to post earnings beat this quarter:

First Majestic Silver Corp. (AG - Free Report) , which is slated to report its third quarter 2020 results on Nov 5, currently has an Earnings ESP of +12.00% and a Zacks Rank #3.

Koppers Holdings Inc. (KOP - Free Report) has an Earnings ESP of +19.27% and a Zacks Rank of 2. It is expected to report third-quarter 2020 results on Nov 5. You can see the complete list of today’s Zacks #1 Rank stocks here.

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