Will Stillwater Earnings Ever Shine Again?

Stillwater Mining (SWC) will release its quarterly report on Thursday, and investors are hoping that the precious-metals miner will continue to show uncanny resiliency in the face of challenging conditions in the metals markets. Although Stillwater earnings will take a hit, the question going forward is whether platinum-group metals will continue outperforming gold and silver, giving Stillwater an edge over other mining companies.

For a long time, Stillwater's status as a pure play on platinum and palladium production made it very unusual in the mining community. But when the company bought Peregrine Metals two years ago, it added gold and copper to Stillwater's mix of products, adding diversification but sacrificing the stock's popularity for those who only wanted platinum-group metal exposure. Let's take an early look at what's been happening with Stillwater Mining over the past quarter and what we're likely to see in its quarterly report.

Stats on Stillwater Mining

Source: Yahoo! Finance.

How will Stillwater earnings fare this quarter?
Analysts have had mixed views on Stillwater earnings in recent months, adding $0.02 per share to their June-quarter estimates but reducing their full-year 2013 predictions by double that amount. The stock has drifted up and down but has moved by less than 1% since early May.

Stillwater has already given investors an idea of how the second quarter looked from its early operational report. The miner said that total Montana mine production dropped about 1.5% to 131,500 ounces in the second quarter, reiterating its estimate of half a million ounces of total production for the year. But recycled material produced a big win for the company, with record processing of more than 329,000 ounces of platinum-group metals in the first half of 2013 coming in almost 43% higher than year-ago levels.

Stillwater also commented on its projects outside the U.S., as its Marathon platinum-group-metal and copper project has been undergoing environmental review. Meanwhile, the company is doing core analysis on drilling samples from its Argentinian Altar gold and copper project.

The company has gone through a substantial management shake-up in the past quarter, as CEO and Chairman Frank McAllister agreed to retire. The company named corporate development vice-president Terrell Ackerman to act as interim CEO, while also putting former Montana governor Brian Schweitzer in as chairman of the board of directors.

Yet the future of Stillwater depends on changing conditions in the metals markets. Rival North American Palladium (PALDF) has suffered from a lack of profitability even though platinum and palladium haven't taken nearly as large a hit as the gold and silver markets, having to get more financing at a sky-high interest rate of 15% and issue an equity private placement with dilutive impact in order to pay for expansion of its Lac des Iles mine. Indeed, ETFS Physical Palladium (PALL -1.65%) has actually climbed in value since the beginning of the year, even as ETFS Physical Platinum (PPLT -0.50%) has traded more in line with gold and is down more than 15% from its February highs.

In the Stillwater earnings report, watch closely to see what progress the company has made in finding new leadership. Until an incoming CEO establishes the company's strategic direction, it could be tough for Stillwater stock to make much headway absent a big spike higher in platinum-group metals prices.

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