Large gold producers split on hitting analysts' expectations in Q2'22

Among 10 select top gold producers, four companies beat analysts' consensus expectations in the second quarter, according to an S&P Global Market Intelligence analysis.

Five of the gold producers missed analysts' consensus expectations for the quarter, reporting earnings per share as much as 27.3% off from the S&P Capital IQ mean consensus estimate.

The price of gold has floundered since hitting its 2022 peak of just over $2,000/oz in early March. The average price of gold in the second quarter was $1,899/oz.

"Gold prices have continued to slide downward as newly spurred recession fears have led to a general market sell-off with everything going lower over the past week," analysts with Haywood Securities Inc. wrote in a Sept. 2 email.

Demand for gold bars and coins remained firm month over month in June, but demand from exchange-traded funds continued to trend lower, Market Intelligence analyst Bjorn Goosen said in an Aug. 31 note on the gold market.

"The weaker demand comes as a consequence of the ongoing macroeconomic conditions, lower GDP forecasts and a rising cost of living globally — all of which still point toward a higher likelihood of recession," Goosen wrote. "Gold has historically performed well against other asset classes in times of recession or elevated geopolitical tensions, yet we maintain a weakening price outlook for the remainder of this year and beyond."

Saudi Arabian Mining Co. (Ma'aden), with a market capitalization of $32.70 billion, beat analysts' expectations by the widest margin on a percentage basis. Analysts expected the company to report 25 cents quarterly earnings per share, but the miner posted actual earnings of 44 cents per share, 76.0% higher.

The state miner reported a record performance in the quarter and its best ever half-year results. In an Aug. 10 release, the mining company said its growth was driven by increased production volumes from new projects as well as increased efficiency at existing operations.

The company also said it was on track to increase its current gold mining capacity by 70%.

Korea Zinc Co. Ltd. beat analysts' expectations by 34.7%, with actual earnings per share of $13.04. And Agnico Eagle Mines Ltd., with record gold production in the quarter, reported 76 cents per share in earnings, 26.7% higher than analysts' consensus estimates.

Barrick Gold Corp. also beat analysts' consensus estimates with 24 cents in earnings per share for the quarter, 9.1% over analysts' expectations.

Brazil-based miner Vale SA was the only miner in the analysis that met but did not exceed analysts' expectations for earnings per share in the second quarter.

Only Saudi Arabian Mining substantially beat analysts' consensus estimates for revenue in the quarter on a percentage basis. With $3.17 billion in annual revenue, the state miner took in 20.7% more than analysts expected in the quarter.

As costs rise due to inflation, several miners struggled to hit analysts' expectations on revenue, and others fell far short. Grupo Mexico Servicios SAB de CV and Freeport-McMoRan Inc. missed analysts' revenue expectations in the period by 13.3% and 11.8%, respectively.

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