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Mining Stocks Q1 Earnings Roster for May 9: FNV, PAAS, AG

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We are in the final lap of the first-quarter earnings season with 409 index members having reported their numbers as of May 4. More than 850 companies are expected to release quarterly results this week. This includes 46 members from the S&P 500 index.

 

Total earnings of the S&P 500 members that have reported results across all sectors are up 24% from the year-ago period while revenues increased 9%. Of the companies that have reported, 78% of the companies delivered an earnings beat, while 76% surpassed revenues estimates. Considering all the companies that are yet to report, the S&P 500 is anticipated to register 23% growth in the quarter, outperforming 13% improvement witnessed in the fourth quarter of 2017. On the revenue front, these companies will put up 8.7% growth on the scoreboard, ahead of the 8.1% rise noted in the fourth quarter 2017. In fact, this quarter is gearing up to be the strongest in more than seven years. (Read more: Is the Earnings Picture Really That Strong?)

 

Per the Zacks Industry classification, the mining industry is grouped under the broader Basic Materials sector. The sector is currently placed at the top 25% out of the 16 Zacks sectors. It is one of the 13 sectors that are projected to witness double-digit earnings growth in the first quarter of 2018. Overall earnings for the sector are anticipated to rise 44.9% while revenues are projected to increase 22.3%.

 

The mining industry has regained ground with the improvement in commodity prices, renewing investors’ interest. Metals such as iron, aluminum and copper are essential to regular technology and infrastructure. President Trump’s promise to go on an infrastructure binge naturally provided a boost to the price of industrial metals last year. Growth in U.S. GDP and continued improvement in end-use sectors like automotive, aerospace and construction acted as tailwinds for metals. Consequently, mining companies’ earnings improved significantly, leverage ratios have come down and improvement was witnessed in their capital allocation plans.

 

The Chinese economy is anticipated to stimulate growth with further construction and infrastructure building projects. Prices have also gained on the back of China's drive to clean up its environment.

 

Though Trump’s recent imposition of tariffs on steel and aluminum imports is a welcome relief to domestic players, the fear of a global trade war is creating a cloud of uncertainty. This worked in favor of the safe haven metal — gold. The Fed’s rate hikes also aided gold prices which declined prior to its implementation in March but experienced gains thereafter. Silver prices also gained in the quarter supported by a weaker U.S. dollar and inflation.

 

Let’s have a sneak peek into three mining companies that are slated to report first-quarter 2018 results on May 9.

 

Franco-Nevada Corporation FNV, a gold-focused royalty and stream company in the United States, Canada, Mexico, Peru, Chile, and Africa is scheduled to release quarterly results after the market closes.

 

Franco-Nevada reported a negative earnings surprise of 3.45% last quarter. The company has an average positive earnings surprise of 4.09% in the trailing four quarters.

 

Franco-Nevada Corporation Price and EPS Surprise
 

Franco-Nevada Corporation Price and EPS Surprise

Franco-Nevada Corporation price-eps-surprise | Franco-Nevada Corporation Quote

The Zacks Consensus Estimate for the first-quarter 2018 is 29 cents, projecting 16% year-over-year growth.

Our proven model does not conclusively show that Franco-Nevada is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.

Though a Zacks Rank #3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Pan American Silver Corp. PAAS, along with its subsidiaries engages in silver mining and related activities. It is slated to release quarterly results after the closing bell.

The company reported a negative earnings surprise of 31.58% in the last reported quarter. The company has an average positive earnings surprise of 6.37% in the last four quarters.

Pan American Silver Corp. Price and EPS Surprise
 

Pan American Silver Corp. Price and EPS Surprise

Pan American Silver Corp. price-eps-surprise | Pan American Silver Corp. Quote

The Zacks Consensus Estimate for the first-quarter 2018 is pegged at 18 cents, projecting a substantial 200% year-over-year improvement over 6 cents in the prior-year quarter.

The combination of Pan American Silver’s Zacks Rank #3 and an Earnings ESP of -18.10% makes a beat unlikely this quarter.

First Majestic Silver Corp. (AG) is engaged in the production, development, exploration, and acquisition of silver mines in Mexico. The company is scheduled to report quarterly numbers after the market close. In the last reported quarter, the company reported a negative earnings surprise of 300%. First Majestic Silver has an average negative earnings surprise of 143.3% over the last four quarters.

First Majestic Silver Corp. Price and EPS Surprise
 

First Majestic Silver Corp. Price and EPS Surprise

First Majestic Silver Corp. price-eps-surprise | First Majestic Silver Corp. Quote

First Majestic Silver’s production in the first quarter of 2018 totaled 3.9 million equivalent ounces of silver, a sequential 9% drop. Per the Zacks Consensus Model, the company is expected to report break-even results in the first quarter 2018 compared with earnings per share of 2 cents in the prior-year quarter.

First Majestic’s Rank #3 and an Earnings ESP of 0.00%, makes surprise prediction difficult.

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Franco-Nevada Corporation (FNV) : Free Stock Analysis Report
 
First Majestic Silver Corp. (AG) : Free Stock Analysis Report
 
Pan American Silver Corp. (PAAS) : Free Stock Analysis Report
 
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