The third-quarter earnings season has gathered steam with 87 members of the S&P 500 Index having reported their quarterly numbers, which make up 24.7% of the Index’s total market capitalization. Per the latest status as of Oct 20, these companies have put a 9.4% increase in earnings on the back of 7.3% higher sales on the scoreboard. Around 71.3% of these companies delivered positive earnings surprises while 70.1% surpassed revenue expectations. (Read more: Three Takeaways from the Q3 Earnings Season)
Taking into account all the S&P members that are yet to disclose their numbers, total earnings for the index are expected to be up 2.6% year over year on a 5% increase in revenues in the third quarter. Though this is a deceleration from an 11.2% increase in earnings in the second quarter and 13.6% in the first, growth graph will pick up from the fourth quarter onwards. Per projections, earnings growth will be 9.3% in fourth-quarter 2017, 9.3% in first-quarter 2018, 9.1% in the second and 12.6% in third-quarter 2018.
The Basic Materials sector, one of the 16 Zacks sectors, is expected to log decline of 9.3% in third-quarter earnings while revenues will rise 9.1%. The mining stocks fall under the Basic Material sector.
Gold gained 5% in the third quarter. Gains from a weaker US dollar and geopolitical tensions between the United States and North Korea were the main highlights. The Fed also drove gold prices during the quarter. Copper has also been on a high as supply disruptions at some of the key copper mines including BHP Billiton Limited’s (BHP - Free Report) Escondida mine (the world's biggest copper mine) in Chile earlier this year and a strike at Freeport-McMoRan’s Grasberg operations in Indonesia led to a decline in mined copper production and provided a thrust to prices.
Further, reports of a potential Chinese ban on certain imports of copper scrap by the end of 2018 as part of the country’s move to reduce waste helped prop prices. This would lead to higher demand for refined copper and copper concentrate. While China’s imports of copper scrap improved this year, the country’s demand for refined copper remains depressed. As such, a ban on scrap would result in increased imports of refined copper. In fact, the non-ferrous metal is among the best performing commodities this year.
In this write-up, we take a sneak peek into four mining stocks that are slated to report their third-quarter 2017 results on Oct 26.
Newmont Mining Corporation (NEM - Free Report) , which is engaged in the production of gold, silver and copper, will report financial results before the market opens. The company’s earnings have surpassed estimates in two of the trailing four quarters while posting in-line earnings in one. The company has an average positive earnings surprise of 14.4%.
Newmont Mining Corporation Price and EPS Surprise