Equity Profile

HMY

Harmony Gold Mining Company Limited

MaterialsGold$9.8B

Aug21Tue

Pre-Earnings Brief

UpcomingQ3-2016Pre-Market9:00 AM EDT

Company Snapshot

Harmony Gold Mining Company Limited (HMY) is a major player in the gold mining industry, focusing on the extraction and production of gold. As a company in the materials sector, it is influenced by fluctuations in gold prices, which can be affected by economic conditions, currency values, and investor sentiment.

Key Metrics to Watch

Gold Production

This metric indicates the company's operational efficiency and ability to generate revenue from its mining activities.

N/A

Cost per Ounce

Understanding the cost structure is crucial for assessing profitability, especially in a volatile gold price environment.

N/A

1 more metrics, Wall Street expectations, options signals, track record, and call prep available with Pro.

HMY Q3-2016 Earnings Preview

Context

Company Snapshot

Earnings Scorecard·Last 8Q

EPS Beat Streak

EPS Beat Rate

13%

Avg EPS Surprise

+3.13%

Avg Stock Reaction

+0.13%

Last Quarter Recap

In the last quarter, Harmony Gold reported an earnings per share (EPS) of $0.01, which was a slight improvement from previous quarters. The stock reacted positively, gaining 9.27% the following day, indicating some investor optimism.

Management Promises & Guidance

Expectations

Wall Street Expectations

Investors are cautiously optimistic about Harmony Gold's upcoming earnings, particularly given the recent uptick in gold prices. However, there are concerns about rising production costs and market volatility.

Bull Case

If Harmony Gold can report strong production numbers and manage costs effectively, it could signal a robust performance that may lead to higher stock prices.

Bear Case

Conversely, if the company reports disappointing production figures or higher-than-expected costs, it could lead to a negative reaction in the stock price.

Expectations

Two Questions That Matter

The print will turn on these two things.

What is the gold production figure for this quarter?

This number will be critical in assessing the company's operational performance and ability to meet market demand.

What is the cost per ounce of gold produced?

Understanding the cost structure will help investors gauge profitability, especially in light of fluctuating gold prices.

Edge

What the Street Is Missing

Why consensus could be wrong

The Street may be underestimating the impact of rising gold prices on Harmony Gold's profitability this quarter. While production costs are a concern, the potential for higher revenue from increased gold prices could offset these challenges.

Supporting Evidence

Gold prices have been trending upward, which could enhance revenue despite cost pressures.

The company's historical performance shows it has consistently beaten EPS expectations, suggesting potential for positive surprises.

Options pricing indicates a significant expected move, suggesting that the market is bracing for volatility.

Key Risk

If gold prices rise significantly post-report, it could invalidate bearish sentiment.

Edge

Thesis-Break Levels

Pre-commit to what would confirm each case.

The core debate this quarter centers around production efficiency and cost management, which are crucial for profitability.

Bull Confirmed If

A gold production figure exceeding 100,000 ounces would confirm the bull case.

Bear Confirmed If

A cost per ounce exceeding $1,200 would confirm the bear case.

Pre-Earnings Positioning

Options Market

Implied Move

±5.1%

Historical Avg

±3.9%

Pricing rich

The options market is pricing in a potential move of about 5.1% in either direction following the earnings report, indicating some uncertainty among investors.

Options are pricing ±5.1% while HMY has averaged ±3.9% over the last 8 prints — setup is pricing rich.

Detail

ATM IV

0.6%

30d HV

69.7%

Calls (701K)P/C Ratio: 0.79Puts (9K)

Preparation

Post-Print Playbook

Likely market behavior by outcome — not investment advice.

Beat & Raise

If Harmony Gold beats expectations, history suggests the stock could rise by around 3.49% on the first day, confirming positive market sentiment.

In-Line / Cautious

If results are in line with expectations, the stock may experience muted movement as investors await further guidance.

Miss

If the company misses on key metrics, history suggests a potential decline of around 3.87%, reflecting investor disappointment.

Earnings Track Record

Preparation

What to Listen For

Call Prep

1Any updates on gold production targets for the next quarter.
2Management's commentary on cost management strategies.
3Insights into market demand for gold and pricing outlook.
4Discussion on any operational challenges faced during the quarter.
5Updates on any new mining projects or expansions.

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Company Snapshot

Key Metrics to Watch

Gold Production

This metric indicates the company's operational efficiency and ability to generate revenue from its mining activities.

N/A

Cost per Ounce

Understanding the cost structure is crucial for assessing profitability, especially in a volatile gold price environment.

N/A

1 more metrics, Wall Street expectations, options signals, track record, and call prep available with Pro.

HMY Q3-2016 Earnings Preview

Context

Company Snapshot

Earnings Scorecard·Last 8Q

EPS Beat Streak

EPS Beat Rate

13%

Avg EPS Surprise

+3.13%

Avg Stock Reaction

+0.13%

Last Quarter Recap

Management Promises & Guidance

Expectations

Wall Street Expectations

Bull Case

If Harmony Gold can report strong production numbers and manage costs effectively, it could signal a robust performance that may lead to higher stock prices.

Bear Case

Conversely, if the company reports disappointing production figures or higher-than-expected costs, it could lead to a negative reaction in the stock price.

Expectations

Two Questions That Matter

The print will turn on these two things.

What is the gold production figure for this quarter?

This number will be critical in assessing the company's operational performance and ability to meet market demand.

What is the cost per ounce of gold produced?

Understanding the cost structure will help investors gauge profitability, especially in light of fluctuating gold prices.

Edge

What the Street Is Missing

Why consensus could be wrong

Supporting Evidence

Gold prices have been trending upward, which could enhance revenue despite cost pressures.

The company's historical performance shows it has consistently beaten EPS expectations, suggesting potential for positive surprises.

Options pricing indicates a significant expected move, suggesting that the market is bracing for volatility.

Key Risk

If gold prices rise significantly post-report, it could invalidate bearish sentiment.

Edge

Thesis-Break Levels

Pre-commit to what would confirm each case.

The core debate this quarter centers around production efficiency and cost management, which are crucial for profitability.

Bull Confirmed If

A gold production figure exceeding 100,000 ounces would confirm the bull case.

Bear Confirmed If

A cost per ounce exceeding $1,200 would confirm the bear case.

Pre-Earnings Positioning

Options Market

Implied Move

±5.1%

Historical Avg

±3.9%

Pricing rich

The options market is pricing in a potential move of about 5.1% in either direction following the earnings report, indicating some uncertainty among investors.

Options are pricing ±5.1% while HMY has averaged ±3.9% over the last 8 prints — setup is pricing rich.

Detail

ATM IV

0.6%

30d HV

69.7%

Calls (701K)P/C Ratio: 0.79Puts (9K)

Preparation

Post-Print Playbook

Likely market behavior by outcome — not investment advice.

Beat & Raise

If Harmony Gold beats expectations, history suggests the stock could rise by around 3.49% on the first day, confirming positive market sentiment.

In-Line / Cautious

If results are in line with expectations, the stock may experience muted movement as investors await further guidance.

Miss

If the company misses on key metrics, history suggests a potential decline of around 3.87%, reflecting investor disappointment.

Earnings Track Record

Preparation

What to Listen For

Call Prep

1Any updates on gold production targets for the next quarter.
2Management's commentary on cost management strategies.
3Insights into market demand for gold and pricing outlook.
4Discussion on any operational challenges faced during the quarter.
5Updates on any new mining projects or expansions.