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ETFs in Focus After Mixed-Bag Gold Mining Q1 Results

Gold bullion prices surged by around 11% this year as bond yields declined and the U.S. dollar made slight gains. Expectations of a slowdown in Federal Reserve rate hikes led to this gain in gold. Risk-off trade sentiments emanating from the banking crisis also favored a gold rally this year.

As a result, the first-quarter 2023 earnings of gold mining companies have become pivotal this season. Let's delve deeper to uncover the earnings and outlook for gold mining stocks as well as analyze its impact on ETFs.

Earnings in Focus

Newmont's (NEM) Q1 Earnings Top, Revenues Lag Estimates

In late April, Newmont reported earnings from continuing operations of 42 cents per share in first-quarter 2023 compared with earnings of 54 cents reported in the year-ago quarter. Barring one-time items, adjusted earnings were 40 cents per share, down from 69 cents reported in the prior-year quarter but ahead of the Zacks Consensus Estimate of 33 cents.

The company’s revenues for the first quarter were $2,679 million, down around 11% year over year. The figure missed the Zacks Consensus Estimate of $2,861.3 million. Newmont's attributable gold production in the first quarter was 1.27 million ounces, down 5% from 1.34 million ounces a year ago. Production was hurt by lower mill recovery.

Newmont said that it is on track to achieve attributable gold production guidance of 5.7-6.3 million ounces. The company also expects gold CAS between $870 and $970 per ounce, and AISC within $1,150-$1,250 per ounce.

Barrick Gold's (GOLD) Q1 Earnings Top Estimates, Revenues Lag

In early May, Barrick Gold reported a first-quarter 2023 net income of $120 million or 7 cents per share, down from $438 million or 25 cents per share in the year-ago quarter. Barring one-time items, adjusted earnings were 14 cents per share. The figure beat the Zacks Consensus Estimate of 11 cents.

Barrick recorded sales of $2,643 million, down around 7.4% year over year. The figure missed the Zacks Consensus Estimate of $3,207.6 million. The results in the reported quarter were hurt by lower year-over-year gold and copper production, a fall in gold sales volumes and higher costs. For 2023, Barrick anticipates attributable gold production in the range of 4.2-4.6 million ounces.

Agnico Eagle (AEM) Q1 Earnings & Revenues Surpass Estimates

In early May, Agnico Eagle Mines reported a first-quarter 2023 net income of $1,816.9 million or $3.86 per share, surging from $119.1 million or 31 cents per share in the year-ago quarter. Barring one-time items, adjusted earnings were 57 cents per share. The bottom line surpassed the Zacks Consensus Estimate of 50 cents.

The company generated revenues of $1,509.7 million, up around 13.9% year over year. It surpassed the Zacks Consensus Estimate of $1,300.3 million. Payable gold production was 812,813 ounces in the reported quarter, up from 660,604 ounces in the prior-year quarter. The company continues to expect payable gold production for 2023 in the range of 3.24-3.44 million ounces.

Wheaton (WPM) Q1 Earnings Match Estimates, Sales Miss

In early May,Wheaton Precious Metals reported adjusted earnings per share of 23 cents in first-quarter 2023, which came in line with the Zacks Consensus Estimate. The bottom line declined 34% year over year. The company generated revenues of $214 million in the reported quarter, down 30% on a year-over-year basis. The downside was caused by a 14.3% decrease in Gold Equivalent Ounces (GEOs) sold. The top line missed the Zacks Consensus Estimate of $228 million.

Wheaton’s gold production was 73,037 ounces, down from the prior-year quarter’s figure of 78,054 ounces. Attributable silver production slumped 21% year over year to 4,927 ounces and palladium production declined 17% to 3,705 ounces.

ETF in Focus

Production worries remained prevalent in the earnings results. This was because gold prices were under pressure last year. However, scenario could improve gradually given favorable operating backdrop for gold miners. VanEck Gold Miners ETF GDX is up 17.7% this year but has lost 4.2% following downbeat-to-neutral earnings results. The afore-mentioned four companies take about 30% of the fund GDX.

Newmont also have about 15% focus on iShares MSCI Global Gold Miners ETF RING and 8.5% focus on Sprott Gold Miners ETF SGDM. Barrick Gold and Agnico Eagle have about 11% and 10% exposure to SGDM, respectively. SGDM is off 2.2% past month while RING has lost about 2.7%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Newmont Corporation (NEM) : Free Stock Analysis Report

Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report

Barrick Gold Corporation (GOLD) : Free Stock Analysis Report

VanEck Gold Miners ETF (GDX): ETF Research Reports

iShares MSCI Global Gold Miners ETF (RING): ETF Research Reports

Sprott Gold Miners ETF (SGDM): ETF Research Reports

Wheaton Precious Metals Corp. (WPM) : Free Stock Analysis Report

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