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Nexa Resources (NEXA) to Report Q4 Earnings: What's in Store?

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Nexa Resources S.A. (NEXA - Free Report) is anticipated to register a year-over-year decline in both revenues and earnings when it reports fourth-quarter 2022 results next week.

Q4 Estimates

The Zacks Consensus Estimate for fourth-quarter total sales is pegged at $611.5 million, suggesting a decline of 9.8% from the prior-year quarter. The consensus mark for earnings currently stands at a loss of 11 cents. The company had reported earnings per share of 1 cent in the fourth quarter of 2021. Over the past 30 days, the estimates have moved up to a loss of 11 cents per share from the previous expectation of a loss of 15 cents.

Q3 Performance

In the last reported quarter, Nexa Resources’ earnings improved year over year and beat the Zacks Consensus Estimate. The company however reported a loss of 31 cents in the quarter, falling way short of the Zacks Consensus Estimate of earnings of 50 cents per share. The company has a trailing four-quarter earnings surprise of negative 52.83%, on average.

Nexa Resources S.A. Price and EPS Surprise


Factors to Note

The company reported a decline in zinc production in the third quarter of 2022 due to lower grades at Cerro Lindo. This decrease was according to the mining plan for the period. Also, the company had scheduled maintenance at the plant to increase the reliability of thickeners and filter circuits, which reduced treated ore volume. This also led to lower copper production for the quarter. Lead production however had increased year over year aided by higher average grade areas in the quarter, while silver production remained relatively flat compared to the last year’s quarter.

For the fourth quarter of 2022, NEXA stated that it expects zinc and copper production to be higher than in the third quarter due to an estimated increase in treated ore and relatively stable feed grade for both metals. Total lead and silver production is likely to have been slightly lower. Zinc sales are expected to have been higher as well, backed by continued solid demand for its products. However, gains from higher sales are likely to have been offset by lower metal prices in the fourth quarter.

Meanwhile, operating costs related to workforce, energy, material and supplies due to inflationary cost pressure are likely to have impacted margins in the quarter to be reported. Nevertheless, improved operating performance and NEXA’s ongoing cost-saving efforts may have negated these headwinds somewhat in the to-be-reported quarter’s results.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Nexa Resources this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Nexa Resources is -3.12%.

Zacks Rank: Nexa Resources currently carries a Zacks Rank #5 (Strong Sell).

Price Performance

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Shares of Nexa Resources have fallen 18.7% over the past year, compared with the industry's 8.9% decline.

Stocks Poised to Beat Estimates

Here are some other companies in the basic materials space, which according to our model, have the right combination of elements to post an earnings beat this quarter:

Albemarle Corporation (ALB - Free Report) , scheduled to release earnings on Feb 15, currently has an Earnings ESP of +7.16% and carries a Zacks Rank of 3.

The Zacks Consensus Estimate for Albemarle’s fourth-quarter earnings has been revised 2.6% upward in the past 60 days. The consensus estimate for ALB’s earnings for the fourth quarter is currently pegged at $7.89.

Royal Gold (RGLD - Free Report) , expected to release earnings on Feb 15, has an Earnings ESP of +7.73%.

The Zacks Consensus Estimate for RGLD’s fourth-quarter earnings is currently pegged at 73 cents. The company currently carries a Zacks Rank of 3.

Teck Resources Limited (TECK - Free Report) , scheduled to release earnings on Feb 21, has an Earnings ESP of +6.78%.

The Zacks Consensus Estimate for Teck Resources’ fourth-quarter earnings is currently pegged at 95 cents. TECK currently carries a Zacks Rank of 2.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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