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The Zacks Consensus Estimate for NGD’s earnings per share has moved down 50% to 1 cent over the past 60 days. The estimate indicates a 50% decline from the year-ago quarter’s earnings per share of 2 cents.
Image Source: Zacks Investment Research
Earnings Surprise History
Over the trailing four quarters, New Gold’s bottom line beat the Zacks Consensus Estimate twice, missed the mark once and matched the same in the remaining quarter. Over the period, the company has recorded an average negative surprise of 16.7%.
In the second quarter, gold prices averaged $2,352.57, marking an 18% increase from the prior-year quarter. Contributing factors were heightened geopolitical tensions, a weaker U.S. dollar, Asia investment flows, strong consumer demand, increasing speculation for monetary policy easing and ongoing central bank purchases. Copper prices were also higher than the year-ago quarter, fueled by supply concerns and increasing expectations of rate cuts. We expect this trend in copper and gold prices to have reflected in New Gold’s top-line performance in the second quarter.
In the first quarter, NGD had produced a total of 70,898 ounces of gold and 13.3 million pounds of copper. Both were in line with the company’s expectations. Gold production was down 14% year over year and copper output was up 29%. Gold volumes sold declined 20% year over year to 70,077 ounces while copper sales improved 26% to 12 million pounds.
The Rainy River mine produced 52,719 ounces of gold in the first quarter, down 20% year over year, mainly due to lower gold grades. During the first half of 2024, lower-grade ore was being processed and waste stripping activities were undertaken at the mine that would enable access to higher-grade ore from the Phase 4 open pit in the second half of the year. Consequently, New Gold had indicated that production would be impacted in the first half and improve thereafter, with 60% of its forecasted annual production to occur in the back half of 2024. We thus anticipate Rainy River’s second-quarter gold production to be lower than the 59,882 ounces produced in the second quarter of 2023.
The New Afton mine produced 18,179 ounces of gold and 13.3 million pounds of copper in the first quarter. Gold production was up 12% year over year due to higher tons milled, partially offset by lower gold grade. The 29% increase in copper production from the prior-year period was attributed to higher tons milled and improved copper grade. This is expected to have continued in the second quarter and we expect gold production at the mine to be higher than second-quarter 2023’s gold output of 16,645 ounces and copper production of 12 million pounds.
The improvement in gold output at the New Afton mine is expected to have been offset by lower gold production at Rainy River in the April-June quarter. We expect total gold production for the second quarter to be lower than the year-ago quarter’s 76,527 ounces. This decline in gold production is likely to have negated the gains from improved gold and copper prices through the quarter.
At Rainy River, operating expense per gold ounce sold is expected to have been higher due to lower gold grade and sales volumes. At New Afton, operating expense per gold ounce sold and per copper pound sold are expected to have decreased from the prior-year period primarily due to higher gold and copper sales volumes.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for New Gold this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, but that is not the case here.
Earnings ESP: The Earnings ESP for NGD is 0.00%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Zacks Rank: New Gold currently sports a Zacks Rank of 1.
Price Performance
The New Gold stock has surged 76% over the past year compared with the industry’s 16.3% growth.
Image Source: Zacks Investment Research
Stocks That Warrant a Look
Here are some gold mining companies, which according to our model, have the right combination of elements to post an earnings beat this quarter:
The Zacks Consensus Estimate for IAG’s second-quarter earnings has been revised 14.3% upward over the past 60 days and is pegged at 8 cents per share. The estimate indicates a significant turnaround from the loss of 1 cent per share reported in the second quarter of 2023.
Agnico Eagle Mines (AEM - Free Report) , scheduled to release second-quarter earnings on Jul 31, currently has an Earnings ESP of +6.31% and a Zacks Rank of 2.
The Zacks Consensus Estimate for AEM’s second-quarter earnings is pegged at 86 cents per share, indicating an improvement of 32% from the year-ago quarter’s actual. The estimate has moved up 6% over the past 60 days. AEM has an average trailing four-quarter earnings surprise of 16.5%.
Barrick Gold (GOLD - Free Report) , scheduled to release second-quarter earnings on Aug 12, has an Earnings ESP of +3.29% and a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Barrick Gold’s second-quarter earnings has moved down 3.7% over the past 60 days to 26 cents per share. The estimate indicates an improvement of 37% from the year-ago quarter’s reported figure. GOLD has a trailing four-quarter average surprise of 18.3%.
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Factors Setting the Tone for New Gold's (NGD) Q2 Earnings
New Gold (NGD - Free Report) is set to report second-quarter 2024 results on Jul 30, before the opening bell.
The Zacks Consensus Estimate for NGD’s earnings per share has moved down 50% to 1 cent over the past 60 days. The estimate indicates a 50% decline from the year-ago quarter’s earnings per share of 2 cents.
Earnings Surprise History
Over the trailing four quarters, New Gold’s bottom line beat the Zacks Consensus Estimate twice, missed the mark once and matched the same in the remaining quarter. Over the period, the company has recorded an average negative surprise of 16.7%.
New Gold Inc. Price and EPS Surprise
New Gold Inc. price-eps-surprise | New Gold Inc. Quote
Factors Likely to Have Shaped Q2 Performance
In the second quarter, gold prices averaged $2,352.57, marking an 18% increase from the prior-year quarter. Contributing factors were heightened geopolitical tensions, a weaker U.S. dollar, Asia investment flows, strong consumer demand, increasing speculation for monetary policy easing and ongoing central bank purchases. Copper prices were also higher than the year-ago quarter, fueled by supply concerns and increasing expectations of rate cuts. We expect this trend in copper and gold prices to have reflected in New Gold’s top-line performance in the second quarter.
In the first quarter, NGD had produced a total of 70,898 ounces of gold and 13.3 million pounds of copper. Both were in line with the company’s expectations. Gold production was down 14% year over year and copper output was up 29%. Gold volumes sold declined 20% year over year to 70,077 ounces while copper sales improved 26% to 12 million pounds.
The Rainy River mine produced 52,719 ounces of gold in the first quarter, down 20% year over year, mainly due to lower gold grades. During the first half of 2024, lower-grade ore was being processed and waste stripping activities were undertaken at the mine that would enable access to higher-grade ore from the Phase 4 open pit in the second half of the year. Consequently, New Gold had indicated that production would be impacted in the first half and improve thereafter, with 60% of its forecasted annual production to occur in the back half of 2024. We thus anticipate Rainy River’s second-quarter gold production to be lower than the 59,882 ounces produced in the second quarter of 2023.
The New Afton mine produced 18,179 ounces of gold and 13.3 million pounds of copper in the first quarter. Gold production was up 12% year over year due to higher tons milled, partially offset by lower gold grade. The 29% increase in copper production from the prior-year period was attributed to higher tons milled and improved copper grade. This is expected to have continued in the second quarter and we expect gold production at the mine to be higher than second-quarter 2023’s gold output of 16,645 ounces and copper production of 12 million pounds.
The improvement in gold output at the New Afton mine is expected to have been offset by lower gold production at Rainy River in the April-June quarter. We expect total gold production for the second quarter to be lower than the year-ago quarter’s 76,527 ounces. This decline in gold production is likely to have negated the gains from improved gold and copper prices through the quarter.
At Rainy River, operating expense per gold ounce sold is expected to have been higher due to lower gold grade and sales volumes. At New Afton, operating expense per gold ounce sold and per copper pound sold are expected to have decreased from the prior-year period primarily due to higher gold and copper sales volumes.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for New Gold this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, but that is not the case here.
Earnings ESP: The Earnings ESP for NGD is 0.00%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Zacks Rank: New Gold currently sports a Zacks Rank of 1.
Price Performance
The New Gold stock has surged 76% over the past year compared with the industry’s 16.3% growth.
Image Source: Zacks Investment Research
Stocks That Warrant a Look
Here are some gold mining companies, which according to our model, have the right combination of elements to post an earnings beat this quarter:
IAMGOLD (IAG - Free Report) , set to release second-quarter 2024 earnings on Aug 8, presently has an Earnings ESP of +8.33% and sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for IAG’s second-quarter earnings has been revised 14.3% upward over the past 60 days and is pegged at 8 cents per share. The estimate indicates a significant turnaround from the loss of 1 cent per share reported in the second quarter of 2023.
Agnico Eagle Mines (AEM - Free Report) , scheduled to release second-quarter earnings on Jul 31, currently has an Earnings ESP of +6.31% and a Zacks Rank of 2.
The Zacks Consensus Estimate for AEM’s second-quarter earnings is pegged at 86 cents per share, indicating an improvement of 32% from the year-ago quarter’s actual. The estimate has moved up 6% over the past 60 days. AEM has an average trailing four-quarter earnings surprise of 16.5%.
Barrick Gold (GOLD - Free Report) , scheduled to release second-quarter earnings on Aug 12, has an Earnings ESP of +3.29% and a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for Barrick Gold’s second-quarter earnings has moved down 3.7% over the past 60 days to 26 cents per share. The estimate indicates an improvement of 37% from the year-ago quarter’s reported figure. GOLD has a trailing four-quarter average surprise of 18.3%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.