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Yamana Gold (AUY) to Report Q2 Earnings: What's in Store?

Zacks Equity Research

Yamana Gold Inc. AUY is scheduled to release second-quarter 2020 results on Jul 23, after the closing bell.

Q2 Estimates

The Zacks Consensus Estimate for the second-quarter earnings per share is currently pegged at 3 cents, suggesting an improvement of 50% from the prior-year quarter. The estimate has remained stable over the past 30 days.

A Sneak Peak at Q1 Results

In the last reported quarter, Yamana Gold delivered a year-over-year improvement in earnings despite a decline in revenues. The company delivered a earnings surprise of 66.7% in the first quarter. It has a trailing four-quarter earnings surprise of 72.9%, on average.

Yamana Gold Inc. Price and EPS Surprise

Yamana Gold Inc. Price and EPS Surprise
Yamana Gold Inc. Price and EPS Surprise

Yamana Gold Inc. price-eps-surprise | Yamana Gold Inc. Quote

Factors to Note

Yamana Gold produced 164,141 ounces of gold and 2.01 million ounces of silver in second-quarter 2020. The company produced total 183,582 gold equivalent ounces (GEO) during the quarter. Overall production exceeded planned production guidance driven by strong performances across Jacobina, El Peñón, Canadian Malartic, and Minera Florida mines during the quarter to be reported.

Gold prices have gained 18% so far this year primarily driven by apprehensions regarding the impact of the coronavirus pandemic on the global economy. Low interest rates, renewed U.S.-China tensions and the civil unrest in the United States have also been pushing prices north. Thus, the combination of higher gold prices and better-than-expected production levels might have contributed to Yamana Gold’s second-quarter performance.

However, the company has been incurring COVID-19 related costs such as temporary suspension and standby costs, including those associated with placing certain mines in care and maintenance and subsequent ramp-up of those operations, and the underutilization of labor and contractors in relation to the pre-COVID mine plans. It has also been witnessing incremental costs related to additional personal protective equipment acquisitions, higher transportation costs, and overtime costs. These costs are likely to get reflected in the company’s second-quarter results.

Price Performance

The stock soared 96.8% in a year’s time compared with the industry’s rally of 51.8%.

What the Zacks Model Says

Our proven model doesn’t conclusively predict an earnings beat for Yamana Gold 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 earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: The Earnings ESP for Yamana Gold is -25.00%.

Zacks Rank: Yamana Gold currently carries a Zacks Rank #3.

Few Stocks Likely to Beat Estimates

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

U.S. Silica Holdings, Inc. SLCA has an Earnings ESP of +11.71% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

New Gold Inc. NGD has an Earnings ESP of +249.99% and a Zacks Rank #2.

Teck Resources Ltd TECK has an Earnings ESP of +33.33% and a Zacks Rank #3.

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New Gold Inc. (NGD) : Free Stock Analysis Report
 
U.S. Silica Holdings, Inc. (SLCA) : Free Stock Analysis Report
 
Yamana Gold Inc. (AUY) : Free Stock Analysis Report
 
Teck Resources Ltd (TECK) : Free Stock Analysis Report
 
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