Over half of top mining companies beat analysts' EPS expectations in Q2'21

Over half of the top 25 metals and mining companies by market capitalization with available quarterly earnings data beat analysts' normalized EPS expectations for the second quarter, an S&P Global Market Intelligence analysis found.

Sixteen companies, including the six largest, beat analysts' expectations, while eight fell short in the most recent quarter. Only listed companies with estimated and actual second-quarter EPS as of Aug. 24 were included in the analysis.

The most significant beat on a percentage basis came from Ternium SA, a steel manufacturing company based in Luxembourg with operations in Argentina, Brazil, Colombia, the United States, Guatemala and Mexico. The company reported $5.21 in normalized EPS versus a consensus estimate of $3.60, a difference of 44.7%.

Ternium posted record quarterly sales, margins, EBITDA and net income in the quarter. On an Aug. 4 earnings call, Ternium CEO Maximo Vedoya said strong global steel markets are expected to continue to drive "solid financial performance" for the company through the remainder of 2021.

"Prices are probably going to begin a downtrend at some point during the second half, but I don't expect this to be a very profound downtrend," Vedoya said.

Copper-focused miner Freeport-McMoRan Inc. was the largest company by market capitalization analyzed as of Aug. 25. Freeport beat analysts' expectations by 2.7% with a normalized EPS of 77 cents.

In July, the Phoenix-based company announced that it would be rewarding its shareholders after meeting its net debt targets ahead of schedule.

"We're living in ... a time of great challenge and exceptional opportunity for our business," said Freeport CEO Richard Adkerson on the company's July 22 earnings call. "We're meeting the challenges, embracing the opportunities. Our future is bright."

Barrick Gold was the largest company to beat analyst expectations by a double-digit percentage in the June quarter. The Toronto-based gold producer reported an attributable net income of $411 million, compared with $357 million in the year-ago period.

Barrick President and CEO Mark Bristow said the company is replacing the reserves it mined this year with reserves of at least the same quality. Bristow added that while the industry as a whole has not aggressively pursued new reserves, Barrick is expanding its presence in new countries and identifying new gold discoveries.

Other companies substantially beating analysts' consensus estimates for normalized EPS include MP Materials Corp., Agnico Eagle Mines Ltd., Alcoa Corp., Royal Gold Inc. and Barrick Gold Corp.

The largest misses in the quarter came from Pan American Silver Corp., First Quantum Minerals Ltd. and Cleveland-Cliffs Inc., with EPS misses of 11 cents, 9 cents and 8 cents, respectively.

Ivanhoe Mines Ltd. logged the biggest miss on a percentage basis: The company's 2-cent loss per share fell short of analysts' consensus estimates of 2 cents normalized EPS in the second quarter.