We are heading toward the finale of the Q1 earnings season, with 87% of the S&P 500 members having reported their results as of May 6, 2016 (per the latest Zacks Earnings Trend). We are now in a position to say that the surprise trend has been upbeat as 71.3% of these companies beat EPS estimates and 56.4% surpassed revenue expectations, though earnings growth remains challenging.
Within the Zacks Industry classification, the mining industry falls under the broader Basic Materials sector (one of the 16 Zacks sectors). Our Q1 scorecard shows that 85% of the sector has reported results so far with a 14.9% drop in earnings and revenue decline of 9%. Considering all the companies that are yet to report, the sector is expected to witness a double-digit decline in Q1.
The disappointing performance stems from volatile oil prices, slowdown of the Chinese economy and geopolitical tensions. The mining industry also remains challenged by these headwinds. Moreover, miners have been cutting down on expenditure in the wake of lower commodity prices. This will continue to remain a drag on the broader space for the year.
Among the companies scheduled to report this week, let’s see what’s in store for these major mining stocks gearing up to release their quarterly numbers on May 11.
Asanko Gold Inc. (AKG - Free Report) is engaged in the exploration and development of gold deposits. The company has a mixed earnings track record. Notably, Asanko Gold has delivered a positive earnings surprise of 16.67% on an average over the last four quarters. However, its Zacks Rank #3 (Hold) and Earnings ESP of 0.00% do not conclusively show that the company is likely to beat earnings estimates this quarter.
Eldorado Gold Corporation (EGO - Free Report) , a gold producing and exploration company has delivered an average negative earnings surprise of 75.00% over the trailing four quarters. The stock carries a Zacks Rank #3, which coupled with a negative ESP, makes surprise prediction difficult.
Mountain Province Diamonds Inc. a diamond exploration and development company has delivered a positive earnings surprise of 3.33% on an average over the last four quarters. Once again, it is difficult to conclusively predict an earnings beat by Mountain Province Diamonds this quarter, given the company’s Zacks Rank #4 (Sell) and Earnings ESP of 0.00%.
Silver Standard Resources Inc. is focused on the acquisition, exploration and development of silver-dominant projects. Its performance in the recent past has been mostly disappointing, with the company lagging expectations in three of the trailing four quarters, with an average negative surprise of 109.82%. The company holds a Zacks Rank #2 (Buy), which increases the predictive power of ESP. However, the company’s Earnings ESP of 0.00% makes surprise prediction difficult.
Taseko Mines Ltd. (TGB - Free Report) has delivered an average positive earnings surprise of 70.83% over the trailing four quarters. Nonetheless, its Zacks Rank #3 and Earnings ESP of 0.00% do not conclusively show that the company is likely to beat earnings estimates this quarter.
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