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Agnico Eagle (AEM) to Post Q3 Earnings: Is a Beat in Store?

Zacks Equity Research

Agnico Eagle Mines Limited AEM is scheduled to report third-quarter 2019 results on Oct 23, after the closing bell.

The gold miner beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. In this timeframe, it delivered an average positive surprise of around 266.7%.

The stock has rallied 49.4% in the past year compared with the industry’s 51.1% surge.

What the Zacks Model Says

Our proven model predicts an earnings beat for Agnico Eagle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat. That is the case here, as you will see below:

Earnings ESP: Earnings ESP for Agnico Eagle is +7.93%. The Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at 30 cents and 27 cents, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Agnico Eagle currently carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

What Do the Estimates Indicate?

The Zacks Consensus Estimates for Agnico Eagle’s third-quarter revenues is currently pegged at $678 million, which indicates an increase of 28.7% sequentially and 30.6% year over year.  

The Zacks Consensus Estimates for third-quarter gold production is currently pegged at 495,000 ounces, which suggests a rise of 20.1% sequentially.   

Key Developments in Q3

Agnico Eagle’s fully-owned Amaruq deposit at the Meadowbank Complex achieved commercial production on Sep 30, 2019. Moreover, ore processing at Amaruq started in August 2019 by using low-grade stockpiles.  

Production at the Meadowbank complex totaled 48,869 ounces of gold in third-quarter 2019, which was 22.2% higher than the previous projection of 40,000 ounces. This included pre-commercial payable gold production of 35,281 ounces at Amaruq and 13,588 ounces from Meadowbank. Pre-commercial production sales were 32,042 ounces of gold.

Additionally, the Meliadine project started commercial production in May 2019, which is likely to get reflected in the upcoming quarterly results.

Moreover, benefit of higher gold prices is expected to show on Agnico Eagle’s third-quarter margins. After a turbulent 2018, gold has had a stellar run in 2019. Uncertainties over the U.S.-China standoff and geopolitical tensions have triggered demand for gold so far this year. Higher prices have likely had a positive impact on the company’s third-quarter earnings.

Agnico Eagle Mines Limited Price and EPS Surprise


Agnico Eagle Mines Limited Price and EPS Surprise

Agnico Eagle Mines Limited price-eps-surprise | Agnico Eagle Mines Limited Quote


Other Stocks Poised to Beat Estimates

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

Franco-Nevada Corporation FNV has an Earnings ESP of +6.15% and sports a Zacks Rank #1.

Barrick Gold Corporation GOLD has an Earnings ESP of +1.89% and carries a Zacks Rank #3.

Iamgold Corporation IAG has an Earnings ESP of +50.00% and carries a Zacks Rank #3.

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