Earnings for Gold Miners Mixed, GDX Dips 0.3%
Gold shares turned slightly lower on Tuesday amid weakness in precious metals and as the broader equity markets pared their gains.
The Market Vectors Gold Miners ETF (GDX) inched lower by 0.3% to $44.09 per share in afternoon trading after earlier being as high as $44.55. COMEX gold futures settled down by $10.20, or 0.6%, at $1,602.40 per ounce after two better than expected U.S. economic reports. The S&P 500 Index, however, traded up by just 0.2% at 1,406.21 this afternoon after climbing to 1,410.03 this morning.
Within the gold sector, two notable GDX components were in the news after reporting their second quarter earnings results. IAMGOLD (IAG) announced second operating quarter earnings per share (EPS) of $0.20, slightly below the $0.21 consensus estimate among Wall Street analysts. The Canadian-based gold miner also reiterated its full-year production guidance of 840,000-910,000 ounces at cash costs of $670-$695 per ounce.
Following IAMGOLD’s results, Stifel Nicolaus analyst Josh Wolfson lowered his price target on IAG to $16.00 from $17.00 but did reiterate his Buy rating. ”Although the company offers limited near term catalysts and production growth,” he wrote in the firm’s report, “we believe patient investors have the potential to be rewarded with valuation re-rating through delivery of targets.”
AuRico Gold (AUQ.TSX, NYSE: AUQ) also had its price target reduced – by both Scotia Capital and CIBC World Markets – following its earnings results. The Company generated adjusted EPS of $0.07, below the $0.09 consensus estimate. In addition, AuRico announced operational challenges at its Ocampo gold-silver operation in Mexico, which put considerable pressure on the stock yesterday.
CIBC analyst Barry Cooper – who cut his target on AUQ.TSX to C$10.00 from C$14.50 but did reiterate his Sector Outperformer rating – wrote in his report that “AUQ is transitioning through a series of asset sales and accounting complexities that can alienate investors temporarily. Added to the financial reporting anxiety are operational issues at Ocampo that while on the mend, leave the timing of the delivery for growth plans somewhat uncertain…Despite our use of higher costs than projected by the company and a more conservative view on production levels, we find that AUQ remains attractively priced.”
Scotia analyst Trevor Turnbull cut his target on AUQ to $9.00 from $12.50 but also reiterated his Sector Outperform rating.
In afternoon trading, shares of IAG shrugged off the target price reduction by rising 2.3% to $11.49 per share. AUQ, however, dipped 0.5% to $6.32.
Other notable gold miners in the red included Agnico-Eagle Mines (AEM) and Gold Fields (GFI) – which dropped by 0.9% to $44.52 and by 0.6% to $13.61 per share, respectively.
2012-08-14 13:05:24
Source: http://www.goldalert.com/2012/08/earnings-for-gold-miners-mixed-gdx-dips-0-3/
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