Third quarter earnings reports are starting to filter in from
the gold sector, with many shareholders likely hoping that the
results bring better news than Q2's numbers.
) is set to release its Q3 results before market open on Thursday,
and is expected to earn around $0.50 per share on revenues of $2.91
billion, says Donald Selkin, chief market strategist at National
Last quarter, Barrick
a net loss of $8.56 billion, or $8.55 per share, reflecting $8.7
billion in after-tax impairment charges driven by declines in spot
prices and its embattled Pascua-Lama project in South America. The
miner also cut its quarterly
from $0.20 to $0.05 in the summer, while shareholders
for faster changes to the company's board. Barrick shares have
fallen 43.5% so far this year.
"The main issue with [Barrick] once again is cost containment in
light of lower gold prices, and also whether or not they can
increase or cut production," Selkin tells Minyanville. "Their best
hope for the latter is the Pascua-Lama gold mine in the Andes
Mountains between Chile and Argentina," he explains. In Q2, Barrick
said it expected to reduce capital spending at Pascua-Lama by $1.5
to $1.8 billion in 2013-2014.
) kicked off earnings season late last week,
adjusted net earnings in the quarter of $190 million, or $0.23 per
share - beating analysts' expectations by $0.03 per share.
The miner's net earnings came in at $5 million or $0.01 per share,
compared with $498 million or $0.61 per share in Q3 2012, while
Goldcorp's Q3 revenues were $929 million. Last quarter, Goldcorp
reported a net loss of $1.93 billion or $2.38 per share.
Although Goldcorp did beat its earnings estimate in Q3, one of its
problems, says Selkin, is that it has a high forward price/earnings
ratio of 18 relative to other types of mining companies that have
forward ratios of 15.
"On the other hand, this is compensated to some extent because they
have lower debt levels. The main question going forward for this
company as for other gold miners is whether or not they can contain
their costs in light of lower gold prices, and whether they can
increase production," he says.
In a statement, Goldcorp President and CEO Chuck Jeannes said that
the company's focus on "operational discipline and cost
containment" delivered positive results.
"Most of our mines saw meaningful reductions in costs compared to
the previous quarter, with particularly impressive improvement at
some of our higher-cost operations such as Porcupine in Ontario,
[Canada]" he said.
However, Jeannes also mentioned challenges for the miner's Cerro
Negro project in Argentina, including permitting delays, an
"unsustainable" foreign exchange rate, and provincial taxation
uncertainty. "In response, we have suspended exploration and
deferred certain development activities at Cerro Negro, and we are
revising our guidance for first gold production and capital costs,"
Overall, the miner narrowed its guidance for 2013 to between 2.6
and 2.7 million ounces at an all-in sustaining cost of between
$1,050 and $1,100 per ounce.
), the miner
Q3 net earnings of $43.5 million, or $0.06 per share, after
Tuesday's market close, which was down from net earnings of $60
million or $0.08 per share in the same quarter of 2012, partly as a
result of lower commodity prices. Yamana's adjusted earnings were
$69.5 million or $0.09 per share, compared with $177.6 million or
$0.24 per share in Q3 2012.
Yamana's revenues were $456.7 million in the third quarter,
compared with $611.8 million in Q3 2012.
Also on the schedule this week,
) is set to release its earnings after the trading session ends on
Thursday, but investors will have to wait until after market close
on November 13 to see
) Q3 earnings report.