What's in Store for Yamana Gold (AUY) This Earnings Season?

Yamana Gold, Inc.AUY is set to release third-quarter 2017 results after the closing bell on Oct 26.

Yamana Gold reported a net loss from continuing operations of $36.8 million or 4 cents per share in second-quarter 2017, as against the year-ago profit of $30.3 million or 3 cents. Barring one-time items, adjusted results came in at break-even level per share. Analysts polled by Zacks were expecting earnings of 3 cents on an average for the quarter.

Yamana Gold's shares have moved up 6% in the last three months, outperforming the 5.1% growth recorded by its industry .

Let's see how things are shaping up prior to this announcement.

Factors at Play

Yamana Gold, in July, declared that it expects to produce 940,000 ounces of gold in 2017 from six operating mines and roughly 54% of the gold production is anticipated during the second half of the year. The company remains well positioned to achieve the target.

Last week, the company provided preliminary operational results for third-quarter 2017. During the quarter, the company produced 257,000 ounces of gold, 1.43 million ounces of silver and 37.1 million pounds of copper. According to the company, production for the third quarter and first nine months is ahead of budget and guidance.

Yamana Gold expects costs to be within the guidance range provided earlier as costs are trending below the top end of the range at present. For the third quarter, Yamana Gold expects all-in sustaining cash costs for gold and silver not to exceed $735 and $12.50 per ounce, respectively.

The company's cash costs for gold for the third quarter is projected to decline roughly 4% from the second quarter as the Zacks Consensus Estimate for the third quarter is pegged at $643 per ounces.

Notably, Yamana Gold had disclosed during the second quarter that it has elected the third quarter to participate in a program in Brazil to resolve certain tax contingencies. As the company has begun payments under the program, its cash flow will be affected in the third and fourth quarters.

Yamana Gold Inc. Price and EPS Surprise

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

Earnings Whispers

Our proven model does not conclusively show that Yamana Gold is likely to beat the Zacks Consensus Estimate this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is the case here as you will see below:

Zacks ESP: Earnings ESP for Yamana Gold for the third quarter is 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 2 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: Yamana Gold currently carries a Zacks Rank #3, which when combined with a 0.00% ESP, makes surprise prediction difficult. You can see the complete list of today's Zacks #1 Rank stocks here.

Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks Poised to Beat Estimates

Here are some companies in the basic materials space you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

FMC Corporation FMC has an Earnings ESP of +0.88% and sports a Zacks Rank #1.

Air Products and Chemicals, Inc. APD has an Earnings ESP of +0.34% and carries a Zacks Rank #2.

United States Steel Corporation X has an Earnings ESP of +2.41% and carries a Zacks Rank #3.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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