Some big misses for major miners in Q2 EPS results

While fewer than half of 25 large mining companies missed their normalized EPS estimates in the second quarter, standout misses far exceeded the highest beats on a percentage basis, according to S&P Global Market Intelligence data.

Lundin Mining Corp. posted the largest miss at 135.7%, reporting a loss of 5 cents per share when analysts expected a 14-cent gain.

Some of the largest beat and miss percentages were recorded by companies with relatively small changes to their EPS values. Kinross Gold Corp., which missed analyst expectations by 57.1%, underperformed by 4 cents. On aggregate, the 25 companies beat their estimated EPS by an average of 7 cents.

Market capitalization dropped for many of the largest miners amid continued recession fears. At the end of the second quarter, the cumulative market cap of the top 25 miners totaled $1.021 trillion, down 21.5% from the $1.300 trillion at the start of the quarter.

Gold producers see biggest improvements

The company that exceeded expectations by the highest percentage was Canada-based Yamana Gold Inc. The precious metals producer, which announced May 31 that it would be acquired by South African gold producer Gold Fields Ltd., beat expectations by 28.6%, although its EPS of 9 cents was just 2 cents higher than the estimate.

Yamana Gold's executives and those of the second-best performer, Agnico Eagle Mines Ltd., another Canada-based gold producer, told analysts in second-quarter earnings calls that they attributed their relatively high earnings to effective management of inflationary pressures. Agnico Eagle Mines beat normalized EPS estimates by 26.7%, or 16 cents.

*View the latest Commodity Briefing Service for nickel and zinc. *Learn more about second-quarter earnings for Yamana Gold and Lundin Mining.

Gold prices remained relatively stable in the second quarter despite recession concerns, although that trend could change in the third quarter as inflationary pressures take their toll.

Base metal miner suffers

Lundin Mining missed expectations by 19 cents, despite a 10.2% increase in its quarter over quarter nickel production and a 29.4% jump in its quarter over quarter zinc output.

In the company's second-quarter earnings call, Jinhee Magie, senior vice president and CFO, attributed overall revenue declines to steep drops in base metal prices at the end of the quarter.

Kinross and Lundin Mining were two of several major mining companies that cited inflation as a reason for earnings hits in the second quarter.

The overall S&P Metals and Mining Select Industries Index dropped 34% to a quarterly low of $2,219.64 on June 30 from the quarterly high of $3,362.95 on April 14.

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