Mining Stocks' Q3 Earnings Lineup for Nov 14: WPM, SAND, CVIA
The mining industry is housed within the broader Zacks Basic Materials sector. According to the latest Earnings Trends report, the sector is poised to be among 14 of the 16 Zacks sectors that are expected to deliver double-digit earnings growth in third-quarter 2018.
Earnings for the sector are projected to surge 39.4% in the third quarter of 2018 while revenues are expected to go up 16%. With this projected growth, the sector is expected to take the second position among the best performing Zacks sectors in Q3. Notably, the sector had delivered earnings growth of 61.8% and revenue growth of 27.6% in the second quarter of 2018.
Metal prices have remained subdued this year due to the trade tussle between the United States and China. Further, concerns regarding weak data that signal a possible slowdown in China, the biggest metal consumer, have also weighed on metal prices. Further, the Federal Reserve has raised interest rates by 25 basis points to a range of 2.00-2.25%, and signaled one more hike this year. Higher U.S. rates normally weigh on metal prices like gold and silver.
Let’s see what’s in store for some mining companies that are gearing up to report quarterly numbers on Nov 14.
Wheaton Precious Metals Corp. WPM is scheduled to report third-quarter 2018 results after the closing bell. The Canada-based silver and gold streaming company beat estimates in two of the trailing four quarters and came in line in the remaining two. In this timeframe, it recorded average negative surprise of 8.26%.
Silver Wheaton Corp Price and EPS Surprise
Silver Wheaton Corp price-eps-surprise | Silver Wheaton Corp Quote
The company’s high quality portfolio of precious and specialty metal streams in the industry coupled with very low cost mining operations such as Salobo, Antamina and Penasquito will continue to aid third-quarter results. Further, its recent acquisition of Stillwater stream will contribute to third-quarter production and cash flow. However, lower gold and silver prices will weigh on its third-quarter results.
The Zacks Consensus Estimate for revenues for the third-quarter is at $180 million, an expected year-over-year decline of 11%. The Zacks Consensus estimate for earnings is currently pegged at 10 cents, reflecting a plunge of 33% from the 15 cents reported in the prior-year quarter.
Our proven model does not conclusively show that Wheaton Precious Metals will beat earnings estimates in the to-be-reported quarter. This 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. But that is not the case here as you will see below. You can see the complete list of today’s Zacks #1 Rank stocks here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Wheaton Precious Metals currently has a Zacks Rank #3 and an Earnings ESP of -6.25%. (Read more: Earnings Preview: Wheaton Precious Metals Q3 Earnings Expected to Decline)
Sandstorm Gold Ltd SAND is scheduled to report third-quarter 2018 results after the market close. The company fell short of the Zacks Consensus Estimate in three of the trailing four quarters while coming in line in one. The company recorded average negative surprise of 75% over the trailing four quarters.
Sandstorm Gold Ltd Price and EPS Surprise
Sandstorm Gold Ltd price-eps-surprise | Sandstorm Gold Ltd Quote
Recently, Sandstorm Gold announced that it has sold approximately 14,300 attributable gold equivalent ounces during the third quarter of 2018, flat compared with the prior-year quarter. Approximately 85% of the ounces came from operations run by major and mid-tier mining companies. However, lower gold prices may hinder revenues.
The Zacks Consensus Estimate for revenues for the third-quarter is at $19 million, an expected year-over-year growth of 6%. The Zacks Consensus estimate for earnings is pegged at 2 cents, flat compared with the prior-year quarter.
The combination of Sandstorm Gold ’s Zacks Rank #3 and an Earnings ESP of -33.33% makes a beat unlikely this quarter. (Read more: Sandstorm Gold Reports Earnings Next Week: What Awaits?)
COVIA HOLDINGS CVIA, a leading provider of minerals and material solutions for the Industrial and Energy markets, is scheduled to report third-quarter 2018 results before the market opens.
COVIA HOLDINGS Price
COVIA HOLDINGS price | COVIA HOLDINGS Quote
The outlook for the company’s industrial markets remains steady. In the proppant market, continued supply growth has begun to outpace growth in demand, which led to pricing and volume pressure. The company has idled certain facilities to reduce proppant capacity by 3.3 million tons in response to changes in market demand. The Zacks Consensus Estimate for the third quarter for revenues and earnings is pegged at $624 million and 31 cents per share, respectively.
The favorable combination of Covia Holdings’ +3.79% ESP and a Zacks Rank #3 make us reasonably confident of a positive earnings beat this quarter.
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