Newmont Corporation NEM is scheduled to report second-quarter 2020 results before the opening bell on Jul 30. The company’s results are likely to have benefited from higher gold prices during the quarter. However, temporary mine closures due to coronavirus are likely to have impacted its production.

Newmont delivered a negative earnings surprise of 15.2%, on average, over the trailing four quarters. It posted a negative earnings surprise of 7% in the last reported quarter.

The company’s shares have rallied 58.9% year to date, compared with a 7.3% rise recorded by the industry it belongs to.

Let’s see how things are shaping up for this announcement.

What do the Estimates Say?

The Zacks Consensus Estimate for second-quarter consolidated revenues for Newmont is currently pegged at $2,368 million, which calls for a rise of 4.9% year over year.

Some Factors at Play

Among metals, gold has been the bright spot in the second quarter as fears over the coronavirus pandemic made it the most attractive safe-haven asset. Notably, gold prices gained around 13% in the second quarter — the highest quarterly percentage increase in over four years.

Apprehensions regarding the impact of the pandemic on the global economy, a low interest rate environment, renewed U.S.-China tensions and the civil unrest in the United States have pushed gold prices north. As such, higher gold prices are likely to have contributed to Newmont’s second-quarter performance.

However, temporary suspension of operations across certain mines due to the pandemic is expected to have impacted the company’s production and costs in the June quarter. Newmont, in May 2020, said that five of its mines including Penasquito, Cerro Negro and Eleonore were temporarily placed into care and maintenance for an average of 45 days due to the pandemic.

Zacks Model

Our proven model does not conclusively predict an earnings beat for Newmont this season. 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.
 
Earnings ESP: Earnings ESP for Newmont is -0.59%. The Zacks Consensus Estimate for earnings the second quarter is currently pegged at 34 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Newmont carries a Zacks Rank #3.

Stocks That Warrant a Look

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

Kinross Gold Corporation KGC, slated to release earnings on Jul 29, has an Earnings ESP of +3.70% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Agnico Eagle Mines Limited AEM, slated to release earnings on Jul 29, has an Earnings ESP of +4.17% and carries a Zacks Rank #3.

Barrick Gold Corporation GOLD, scheduled to release earnings on Aug 10, has an Earnings ESP of +0.54% and carries a Zacks Rank #3.

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