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What's in the Cards for Royal Gold's (RGLD) Q1 Earnings?

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Royal Gold, Inc. (RGLD - Free Report) is slated to report first-quarter fiscal 2020 earnings results on Nov 6, after the closing bell.

Which Way are Q1 Estimates Headed?

The Zacks Consensus Estimate for Royal Gold’s fiscal first-quarter earnings is currently pegged at 62 cents, suggesting a 169.5% surge, year on year. The Zacks Consensus Estimate for revenues is currently pegged at $138 million, indicating a 38% jump from the year-ago quarter.

A Sneak Peek at Q4

In the last reported quarter, Royal Gold’s adjusted earnings per share of 45 cents missed the Zacks Consensus Estimate of 48 cents. However, the top-line figure of $115.7 million had surpassed the consensus mark of $112 million. While the bottom line improved, top-line figure declined year on year.

Let’s see, how things are shaping up for this announcement.

Factors to Consider

Per Royal Gold’s operational update for the fiscal first quarter, the company has sold 60,000 gold equivalent ounces (GEOs) consisting of around 50,000 gold ounces, 510,000 silver ounces and 1,100 tons of copper related to its streaming agreements. Average realized prices of gold increased 12.7%, year on year, to $1,458 per ounce, while silver prices went up 11.2% to $16.54 per ounce. These factors are likely to have contributed to the company’s top-line growth during the period under consideration.

In the fiscal first quarter, cost of sales was around $337 per GEO compared with the prior-quarter figure of $342 per GEO. This is anticipated to have bolstered the company’s margin in the quarter under review.

Per the latest update on Mount Milligan, Centerra reported positive operating results for the quarter ended Sep 30, 2019, aided by success in its groundwater-exploration program.  Consequently, higher production from Mount Milligan is expected to have benefited Royal Gold’s results in the fiscal first quarter.
 
Notably, Royal Gold’s investments in the Mount Milligan, Andacollo, Pueblo Viejo, Wassa, Rainy River, Peñasquito and Cortez properties generated approximately 76% of its revenues for fiscal 2019. This trend is likely to have continued in the to-be-reported as well.

Gold prices increased during the July-September period, thanks to uncertainties on the U.S-Sino trade front, geopolitical concerns between the United States and the Middle East, along with the Brexit mayhem and a weaker dollar. Royal Gold’s top-line results in the fiscal first quarter will likely reflect impact of higher production and rising gold prices.

Royal Gold, Inc. Price and EPS Surprise

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for Royal Gold this season. 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 uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Royal Gold is 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at 62 cents per share, respectively.

Zacks Rank: Royal Gold currently carries a Zacks Rank of 3.

Stocks That Warrant a Look

Here are a few Basic Materials stocks which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Franco-Nevada Corporation (FNV - Free Report) has an Earnings ESP of +0.34% and sports a Zacks Rank of 1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross Gold Corporation (KGC - Free Report) also flaunts a Zacks Rank #1 currently and has an Earnings ESP of +2.50%.

Arconic Inc. (ARNC - Free Report) , a Zacks Ranked #3 stock, has an Earnings ESP of 1.41%.

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