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Yamana Gold Earnings: An Early Look

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Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and Yamana Gold (NYSE: AUY  ) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Lately, having a favorable low-cost structure has been essential for mining companies, with substantial cost pressures affecting the way mines do business. Yamana sports some of the most impressive cost figures in the industry. Let's take an early look at what's been happening with Yamana Gold over the past quarter and what we're likely to see in its quarterly report on Wednesday.

Stats on Yamana Gold

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$665 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will Yamana Gold shine brighter this quarter?
Yamana hasn't generated much optimism among analysts lately, with consensus earnings-per-share figures having come down by $0.03 for the just-ended quarter and by a full $0.25 for full-year 2013. Investors have been equally bearish, sending the stock down 17% just since mid-November.

Yamana leads the industry in arguably the most important metric in the mining industry: cash cost. With its latest figure of $201 per ounce, Yamana beats fellow low-cost leader Goldcorp (NYSE: GG  ) while still retaining more potential for production increases than its larger competitor. That has become extremely important, as many players have reined in expansion projects because of high costs and labor considerations.

But recently, gold and silver prices have fallen sharply. Despite strong central-bank purchasing activity in the past year and particularly high interest in SPDR Gold (NYSEMKT: GLD  ) and other exchange-traded gold bullion products, gold is now down 7% over the past year and more than 4% in just the past month.

Last week, Yamana provided a favorable update on its Cerro Moro development in Argentina. The report boosted Yamana's estimate of indicated mineral resources by 44% and went into detail on how Yamana expects to expand the project. Yet with local Argentine political considerations having led Pan American Silver (NASDAQ: PAAS  ) to defer development of its Navidad mine recently, Yamana has to tread the complex political waters carefully.

In its quarterly report, look closely at Yamana's new all-in cost metric to get a better sense of how its costs compare with its industry peers. With mining stocks having been under pressure for a long time, Yamana can still distinguish itself by demonstrating its comparative value proposition as a leading miner.

Can Yamana beat out Goldcorp?
Yamana is a cost leader, but Goldcorp has a commanding position within the gold-mining market. For the past several years, investors have been the beneficiaries of several successful acquisitions and strong organic growth, but can Goldcorp outperform its competitors? Find out in our premium research report on Goldcorp, in which Fool gold expert Christopher Barker explains his bullish position on the stock. Click here to get your copy instantly.

Click here to add Yamana Gold to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

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Related Tickers

9/28/2016 11:21 AM
AUY $4.28 Down -0.04 -0.81%
Yamana Gold CAPS Rating: ***
GG $15.96 Down -0.31 -1.91%
Goldcorp CAPS Rating: ***
GLD $125.94 Down -0.68 -0.54%
SPDR Gold Trust CAPS Rating: **
PAAS $17.47 Down -0.06 -0.34%
Pan American Silve… CAPS Rating: **