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Gold Mining Stocks to Watch for Earnings: AUY, RGLD & KL

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A few gold mining companies are slated to report their quarterly numbers tomorrow. Per the Zacks Industry classification, the gold mining industry is grouped under the broader Basic Materials sector, which is among the Zacks sectors that are expected to record the strongest gains in Q1. Earnings for the sector are projected to surge 42.1% in Q1, while revenues are expected to move up 21%, per the latest Earnings Preview.

Gold prices have been volatile but range-bound this year. Spot gold touched the 2018 high of $1,366 an ounce on Jan 25 and the yellow metal is currently trending above the psychological level of $1,300 an ounce.

Gold prices were supported by a weaker U.S. dollar and inflation in Q1. The U.S. Federal Reserve’s rate hikes also aided gold prices, which declined prior to its implementation in March but experienced gains thereafter. Moreover, the Trump administration imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports, which triggered fears of a trade war and in turn led to a spurt in gold prices.

Concerns over a trade war and geopolitical tensions reduced investors' appetite for riskier assets and fueled demand for the safe-haven gold. This bolstered gold prices in the quarter under review.

There are also plenty of reasons to be optimistic about gold’s performance this earnings season and the rest of 2018. A number of new mines entered production in fourth-quarter 2017, which might support mine production in 2018. On the demand side, major markets, India and its neighbor China will continue to be growth drivers.

Further, the United States continues to be a strong market driven by economic growth, improving employment levels and growth in consumer confidence. Demand from central banks is also expected to remain strong.

Let’s see what’s in store for the gold mining companies that are gearing up to report quarterly numbers tomorrow.

Yamana Gold Inc. will report Q1 earnings numbers after the bell. The company has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a penny per share. While the stock carries a favorable Zacks Rank #3 (Hold), its ESP makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Yamana Gold beat the Zacks Consensus Estimate in two of the trailing four quarters, while missed in two, resulting in an average negative surprise of 12.5%.

For Q1, the company’s total gold production is expected to decrease roughly 3% year over year as the Zacks Consensus Estimate is currently pegged at 260,000 ounces.

Yamana Gold is likely to gain from its El Penon operation. It expects the operation to continue delivering strong performance based on successful right-sizing actions that were completed last year. This is allowing the company to efficiently mine its ore range. (Read more: What's in the Cards for Yamana Gold in Q1 Earnings?)

Yamana Gold Inc. Price and EPS Surprise

 

Yamana Gold Inc. Price and EPS Surprise | Yamana Gold Inc. Quote

Royal Gold, Inc. (RGLD - Free Report) , which is slated to report fiscal Q3 results, has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 44 cents. While the stock carries a Zacks Rank #3, its ESP makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Royal Gold beat the Zacks Consensus Estimate in two of the trailing four quarters, while missed twice, delivering an average positive surprise of 6.7%.

The Zacks Consensus Estimate for revenues for the to-be-reported quarter stands at $118.6 million, reflecting an expected increase of 10.9% from the year-ago quarter.

Royal Gold, last month, provided an update on its operations for fiscal Q3. The company noted that its Q3 deliveries were not impacted by the temporary shutdown of the mill processing facility at Mount Milligan occurring in early calendar 2018. However, the company expects this shutdown to impact its mid-calendar 2018 results as some of the gold and copper deliveries expected in June through August will be deferred to a later date.

The company is expected to benefit from the new U.S. tax reform, which is likely to have a favorable impact on its results through a reduction in the corporate tax rate.

Royal Gold, Inc. Price and EPS Surprise

 

Royal Gold, Inc. Price and EPS Surprise | Royal Gold, Inc. Quote

Kirkland Lake Gold Ltd. will report Q1 results before the bell. The company has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 23 cents. While the stock carries a Zacks Rank #3, its ESP makes surprise prediction difficult.

The company delivered an average positive earnings surprise of 2.7% over the trailing four quarters.

Kirkland Lake is expected to benefit from its efforts to boost production and improve unit cost performance. The company, last month, reported its production numbers for Q1. It recorded strong production growth of 13% year over year to 147,644 ounces.  

The production number came ahead of the company’s target for the quarter, driven by record production in March on the back of a positive grade performance across the Fosterville and Macassa mines. The company recorded 39% and 11% year-over-year growth in production in Fosterville and Macassa, respectively. Strong production is expected to drive the company’s results in Q1. 

Kirkland Lake Gold Ltd. Price and EPS Surprise

 

Kirkland Lake Gold Ltd. Price and EPS Surprise | Kirkland Lake Gold Ltd. Quote

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