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Can Gold Miners Offer Up Earnings Surprises?

Can Gold Miners Offer Up Earnings Surprises?
  • Two leading gold mining companies are on deck to share their latest results this week.
  • Wall Street's earnings estimates have been dwindling for both of them.
  • Yet both of them topped earnings expectations in the previous period.

Market volatility since the beginning of the year has been good for gold prices, but will that translate to positive earnings surprises from leading gold miners?

Wall Street doesn't seem too hopeful, judging by the consensus earnings estimates for Barrick Gold Corporation (NYSE: ABX) and Newmont Mining Corp (NYSE: NEM), both of which are expected to post quarterly results this week.

The analysts are looking for declines on the top and bottom lines for the fourth quarters from both of them, with consensus earnings estimates shrinking in recent weeks for both as well. Yet in both cases earnings exceeded their expectations in the previous quarter.

Below is a quick look at what is expected from the reports of these two stocks. That is followed by a quick peek at some of the week's other most anticipated earnings reports.

Barrick Gold

When this Toronto-based gold and copper miner shares its results Wednesday afternoon, the consensus forecast of Estimize calls for a profit of $0.09 per share for the fourth quarter. That would be down from earnings per share of $0.15 in the same period of last year. Wall Street is more pessimistic, with consensus expectations of $0.06 per share, after slipping $0.02 in the past month.

Revenue for the three months that ended in December will be $2.33 billion, or down around 7 percent year-over-year, if the 11 survey respondents are correct. Wall Street analysts are looking for just $2.22 billion for the quarter, as well as $8.96 billion (down more than 12 percent) for the full year.

See also: Wal-Mart To Kick Off Retail Earnings Season

Newmont Mining

Wall Street's fourth-quarter forecast for this Colorado-based miner calls for EPS to have inched down from $0.17 in the year ago period to $0.13. Some 5 Estimize respondents predict EPS will be $0.15 for the period that ended in January. Note that both Wall Street and Estimize underestimated EPS in recent quarters, including by more than a third in the most recent.

Revenue also topped the Estimize consensus in the third quarter, and this time the respondents are looking for about $1.79 billion, which is less than the $1.82 billion Wall Street expects. Newmont reported $2.02 billion in revenue in the year-ago quarter. The company is scheduled to report after Wednesday's closing bell.

And Others

Agilent Technologies, Dean Foods, Discovery Communications, Duke Energy, Express Scripts, Hormel Foods, Liberty Global, Marriott, MGM Resorts, Priceline, T-Mobile and Waste Management are among the companies that Wall Street analysts expect to show earnings growth this week.

Earnings declines are in the works for Analog Devices, Applied Materials, Community Health Systems, Deere, Devon Energy, Dish Network, Nordstrom, Rackspace, Starwood Hotels and Wal-Mart, as well as a net loss for Marathon Oil, if the consensus forecasts are correct.

At the time of this writing, the author had no position in the mentioned equities.

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