We are in the final lap of the second-quarter earnings season, with 433 S&P 500 members having reported their results. These companies that account for 87.7% of the index’s total market capitalization, have reported a 4.1% dip in earnings.
As per the Zacks Industry classification, the mining industry is grouped under the Basic Material sector – one of the 16 broad Zacks sectors. With 95% of the companies in this sector having reported their numbers, we are in the last leg of this sector’s earnings season. The sector has put up an 11.8% decline in earnings on the scoreboard. Considering the companies that are yet to report, the sector’s earnings are expected to drop 11.7% in the quarter.
However, it is not the only sector to suffer an earnings decline this quarter. Earnings growth is anticipated to be in the negative territory for 7 of the 16 Zacks sectors, with Energy being the obvious biggest laggard. Looking at the projected estimates for the quarter, total S&P 500 earnings are expected to be down 3.5% on the back of a 0.4% dip in revenues. The quarter is on track to be the fifth quarter in a row to suffer an earnings decline. (Read more: Retail Sector's Disappointing Q2 Earnings Season).
Let’s see what’s in store for these miners that are set to report quarterly numbers on Aug 9, 2016.
Tahoe Resources Inc. (TAHO - Free Report) – miner of copper, gold, silver, lead/zinc, and natural gas and petroleum – will report its second-quarter results on Aug 9 after the market closes. Last quarter, the company had delivered a positive earnings surprise of 100%. The company has an average positive earnings surprise of 60% in the last four quarters.
The Lake Shore buyout has added about 170,000–180,000 ounces of low-cost annual gold production in one of the world’s great gold mining camps Timmins, Ontario. The company also has a solid pipeline of projects and exploration projects that will support significant growth in both production and mine life, henceforth. We expect Tahoe Resources to come up with a positive earnings surprise this season backed by its Zacks Rank #2 (Buy) and Earnings ESP of +8.33%.
Klondex Mines Ltd. , which is focused on exploration, development and production of mineral properties, will report second-quarter figures on Aug 9 after the market closes. Last quarter, the company had delivered a negative earnings surprise of 200%. The company has an average negative earnings surprise of 25% over the trailing four quarters.
Given its strong operational and financial performance, the company continues to accelerate its exploration and development efforts. It expects a stronger second half of the year as it stands to benefit from the development work performed in the first half. The stock’s Earnings ESP of 0.00% and a Zacks Rank #2 (Buy) makes surprise prediction difficult.
General Moly, Inc. (GMO - Free Report) – miner of molybdenum and copper – is expected to report second-quarter results on Aug 9.
The company continues to prudently manage financial liquidity and flexibility to sustain it over the medium term, including consistently stringent cost management throughout the organization. The company’s Earnings ESP of 0.00% and a Zacks Rank #3 (Hold) make surprise prediction difficult.
Solitario Exploration & Royalty Corp. (XPL - Free Report) primarily explores for gold, silver, platinum, palladium, copper, lead and zinc deposits and is expected to report second-quarter results on Aug 9. The company has an average positive earnings surprise of 100% over the trailing four quarters.
Solitario will continue its battle-tested strategy of identifying and acquiring attractive, high potential precious and base metal projects where it can add significant value. The company’s Earnings ESP of 0.00% and a Zacks Rank #3 (Hold) make surprise prediction difficult.
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