Mining companies need to disclose more information ahead of earnings releases to offset volatility in their share prices, says RBC Dominion Securities Inc. analyst Dan Rollins.
Over the past few years, North American gold producers have seen a noticeable uptick in share price volatility during earnings season, in part because investors are being blindsided by so-called “misses” or “beats” that analysts don’t see coming.
Before quarterly earnings are released, data providers such as Thomson Reuters canvass analysts on their expectations for metrics, such as earnings per share (EPS), revenue and non-GAAP items such as adjusted EPS.
Companies reporting better-than-expected results are seeing spikes over and above the norm in their share prices, while those failing to live up to expectations are experiencing even more pronounced sell-offs.
In a report sent to clients on Tuesday, Mr. Rollins wrote that companies that reported earnings misses during 2016 and 2017 immediately underperformed the overall gold mining sector by 3.5 per cent.