Most of the top 25 metals and mining companies by market capitalization beat S&P Global Market Intelligence consensus normalized EPS estimates in the third quarter, an analysis shows.
An analysis of the top 25 mining companies indicated that 18 beat analysts' expectations for earnings in the third quarter. The 12 largest mining and metals companies by market capitalization all beat analysts' expectations.
The largest beat on a percentage basis was First Quantum Minerals Ltd. The British Columbia-based company reported third-quarter net earnings of $29 million and normalized EPS of 9 cents. The miner booked a loss of $73 million in the third quarter of 2019 and a loss of $156 million in the second quarter of 2020.
First Quantum reported that its Cobre Panama copper mine Panama achieved full production earlier than expected following a shutdown due to a COVID-19 outbreak in April. The company also reported strong sales from its majority-owned Kansanshi copper-gold mine in Zambia.
"Although in some jurisdictions, there's been some easing up of restrictions related to the virus, in others, new or tougher restrictions are being put in place as we now seem to be dealing with a second wave," First Quantum President Clive Newall said on an Oct. 29 earnings call. "However, despite these continuing restrictions, the third quarter was solid operationally and financially overall."
Gold producers have benefited from a higher gold price for several months, in part due to investors flocking to the commodity amid broader volatility in the market and concerns about the COVID-19 pandemic.
Gold producer Newmont Corp., the largest metals and mining company in the analysis, reported normalized EPS of 86 cents in the quarter, beating analysts' consensus estimates by 3 cents. During an Oct. 29 earnings call, the Colorado-based company touted $1.3 billion in record cash flows, a growing cash balance and a boost to its quarterly dividend, after reporting net income of $839 million for the third quarter.
Newmont President and CEO Tom Palmer highlighted the company's ability to deliver more than 7 million gold equivalent ounces per year for the next decade.
"Our project pipeline is unmatched in the gold industry and is one of the best in the mining industry," Palmer said during the October call. "There is significant value to unlock as we optimize and advance our longer-term projects and lay the pathway for steady production and cash flow well into 2040."
Barrick Gold Corp., another gold mining major, beat analysts' expectations by 9 cents, with normalized EPS of 41 cents in the third quarter. The Toronto-based gold producer also reported a record cash flow of $1.3 billion in the third quarter, after booking net income of $882 million.
Barrick Gold CEO Mark Bristow pointed to the company's strategy of maintaining a flat organizational structure as one factor that allowed the company to manage through the pandemic and post three strong quarters in a row.
"In the face of an unprecedented challenge, we have been able to beat earnings consensus, reinforce our business planning and capitalize on the gold price to maintain an industry-leading balance sheet," Bristow said. "We did not have to change our core strategy to contend with the coronavirus."
Southern Copper Corp., the third-largest company analyzed, reported normalized EPS of 65 cents, 10 cents higher than expected. The Arizona-based company is 89%-owned by Grupo México SAB de CV, and it reported a 29.9% year-over-year increase in earnings in the third quarter to $506 million, while its copper output slipped 2.3% year over year.