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Gold Mining Q2 Earnings Mostly Upbeat: ETFs in Focus

·4 min read
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Gold miners remained one of the biggest coronavirus beneficiaries as VanEck Vectors Gold Miners ETF GDX added about 19.2% in the past three months (as of Aug 13, 2020). In comparison, gold bullion ETF GLD advanced about 10.8%. The space comes from a favorable Zacks industry (placed at the top 30% of total 250+ industries in the Zacks universe).

The Fed’s super-dovish stance since March and the resultant moderate strength in the greenback, lower oil prices, cheaper valuation and relatively low debt of mining companies facilitated this spectacular performance (read: 5 Reasons Why Gold Mining ETFs & Stocks Have More Room to Run).

Gold mining companies are better positioned than they’ve been in 10-20 years with low operating costs, healthy balance sheets, and attractive valuations, as per investment management firm VanEck.

Against this scenario, let’s take a look at how gold mining stocks have performed so far this reporting season (read: Silver ETFs or Gold: Which Metal to Shine More Ahead?).

Inside Earnings Releases

Barrick Gold Corporation GOLD recorded net earnings (on a reported basis) of $357 million or 20 cents per share in second-quarter 2020, up from $194 million or 11 cents in the year-ago quarter. Barring one-time items, adjusted earnings per share increased 155.6% year over year to 23 cents. The figure also beat the Zacks Consensus Estimate of 19 cents. Barrick recorded total sales of $3,055 million, up 48.1% year over year. The figure topped the Zacks Consensus Estimate of $2,656.5 million.

Wheaton Precious Metals Corp. WPM reported adjusted earnings of 22 cents per share in second-quarter 2020, beating the Zacks Consensus Estimate of 19 cents. The bottom-line figure also surged 131% year over year. The company generated revenues of $248 million in the reported quarter, up 31% on a year-over-year basis. Also, the top line outpaced the Zacks Consensus Estimate of $208 million.

Kinross Gold Corporation KGC logged a profit of $18.6 million or 16 cents per share in second-quarter 2020, down from $29.5 million or 25 cents per share in the year-ago quarter. Earnings, however, beat the Zacks Consensus Estimate of 4 cents. Net sales fell 20% year over year to $386 million, hurt by lower sales volumes and lower average TiO2 selling prices. However, the figure beat the Zacks Consensus Estimate of $369.9 million.

Newmont Corporation NEM reported net income from continuing operations of $412 million or 51 cents per share in second-quarter 2020, up from $1 million or breakeven per share in the year-ago quarter. Barring one-time items, adjusted earnings were 32 cents per share that missed the Zacks Consensus Estimate of 34 cents. Newmont reported revenues of $2,365 million, up 4.8% year over year. However, the figure missed the Zacks Consensus Estimate of $2,368.4 million.

ETFs in Focus

All the stocks mentioned above have a considerable focus on VanEck Vectors Gold Miners ETF. Investors can also bet on other gold mining ETFs like iShares MSCI Global Gold Miners ETF RING, Sprott Gold Miners ETF SGDM and US Global Go Gold and Precious Metal Miners ETF GOAU to gain access to the aforementioned stocks.

Though the price of the gold bullion has been a bit volatile lately, gold mining companies have been experiencing more gains than their bullion counterparts in a rising metal market since they act as a leveraged play on the underlying metal prices.

Additionally, better-than-expected earnings releases from most gold mining companies added to the strength. These factors along with still-lower oil prices, which make up a significant portion of a miner’s costs, could help mining stocks ahead (read: Which Gold ETF is Better, GLD or GDX?).

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Click to get this free report Kinross Gold Corporation (KGC) : Free Stock Analysis Report Newmont Corporation (NEM) : Free Stock Analysis Report Barrick Gold Corporation (GOLD) : Free Stock Analysis Report SPDR Gold Shares (GLD): ETF Research Reports Sprott Gold Miners ETF (SGDM): ETF Research Reports VanEck Vectors Gold Miners ETF (GDX): ETF Research Reports iShares MSCI Global Gold Miners ETF (RING): ETF Research Reports U.S. Global GO GOLD and Precious Metal Miners ETF (GOAU): ETF Research Reports Wheaton Precious Metals Corp. (WPM) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research 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