Per the Zacks industry classification, the mining industry falls under the broader Basic Materials sector. The sector is anticipated to log a decline of 32.6% in earnings, per the latest Earnings Trends. However, the slump is not restricted to this sector alone, as 10 of the 16 Zacks sectors are expected to log declines this earnings season, mostly casualties of COVID-19 outbreak.
Among metals, gold has been the only bright spot as mounting fears over the coronavirus pandemic has multiplied its safe-haven appeal manifold. Further, slump in crude oil prices, a low interest rate environment and geopolitical tensions are likely to have boosted demand for gold. All these factors sent gold soaring above the $1,600 an ounce mark and clocking a 6% gain in the January-March period.
However, copper and silver had a tough quarter. Given their widespread usage as industrial metals, the slowdown in industrial activity following the virus outbreak dealt a massive blow. Per the Federal Reserve, industrial production contracted 7.5% in first-quarter 2020 — the steepest since second-quarter 2009. Meanwhile, per the Institute for Supply Management, the Manufacturing Purchasing Managers’ Index (PMI), after recording 50.9 in January and 50.1 in February (indicating expansion), contracted again to 49.1% in March. Also, weak demand from China, the world’s biggest consumer of metals also weighed on metal prices. This impacted zinc prices as well.
Metal producers worldwide had to suspend production, slow project construction or curb their operations to only critical activities in accordance to government’s mandates to contain the spread of coronavirus. Notably, miners have been committed to cutting operational costs and capital spending, improving operating efficiency within existing mines and paying down debt. These actions, along with lower oil prices, which makes up significant portion of a miner’s costs, is likely to have boosted margins.
Let’s take a look at four mining companies that are gearing up to report their March ending quarter results on May 14.
SSR Mining Inc. (SSRM - Free Report) is scheduled report first-quarter 2020 results after the market close. The company has surpassed the Zacks Consensus Estimate in three of the four trailing quarters while missing the same once. The company has a positive four-quarter earnings surprise of 77.8%, on average.
Silver Standard Resources Inc Price and EPS Surprise
Per the Zacks quantitative model, 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. You can see the complete list of today’s Zacks #1 Rank stocks here.
SSR Mining has a Zacks Rank #2 and an Earnings ESP of +13.57%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company’s first quarter performance is likely to have benefited from rising gold prices and higher gold sales. However, lower silver prices and reduced silver sales due to temporary suspension of operations might have negatively impacted results. The Zacks Consensus Estimate for its first-quarter 2020 earnings is currently pegged at 23 cents, indicating an improvement of 64.3% from the year-ago quarter. The estimates have been revised downward by 4% in the past 30 days. (Read more: Silver Standard to Post Q1 Earnings: What's in Store?)
First Majestic Silver Corp (AG - Free Report) will report first-quarter 2020 numbers ahead of the bell. The company missed the Zacks Consensus Estimate for earnings in three of the trailing four quarters while coming in line once. It has a trailing four-quarter negative earnings surprise of 53.8%, on average.
First Majestic Silver Corp Price and EPS Surprise
The company currently has a Zacks Rank of 3 and an Earnings ESP of -20.00%.
In the first quarter, the company recorded stellar consolidated production of 6.2 million silver equivalent ounces, comprising 3.2 million ounces of silver and 32,202 ounces of gold. Total production came in line with the previous quarter and 9% above the previous guidance. However, lower silver prices are likely to have offset the impact of higher production on the first-quarter results.
The Zacks Consensus Estimate for First Majestic’s first-quarter earnings has been revised downward by 25% over the past 30 days and is currently pegged at 3 cents. This indicates a significant improvement from loss of a cent per share in the prior-year quarter.
SilverCrest Metals Inc (SILV - Free Report) is slated to report first-quarter 2020 results. The company missed the Zacks Consensus Estimate in two of the trailing four quarters, while matching the same twice. The company has a trailing four-quarter negative earnings surprise of 200%, on average.
SilverCrest Metals Inc Price and EPS Surprise
The company currently has a Zacks Rank #3 and an Earnings ESP of 0.00%.
The Zacks Consensus Estimate for the company is pegged at a loss of 3 cents per share for the first quarter. The estimate has remained stable in the past 30 days.
HudBay Minerals Inc (HBM - Free Report) will report first-quarter 2020 results after the closing bell. The company has a trailing four-quarter positive earnings surprise of 41.3%, on average.
HudBay Minerals Inc Price and EPS Surprise
The Zacks Consensus Estimate for the first quarter has been revised downward in the past 30 days and currently stands at a loss of 13 cents per share. The company had reported earnings per share of 3 cents in the prior-year quarter.
Hudbay Minerals has a Zacks Rank #3 and an Earnings ESP of -3.48%.
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