Investors will get a new sense of how Canadian miners are dealing with the wobbly commodities cycle this week when some key producers start to report quarterly results.
Companies due to report are Teck Resources Ltd., the country's largest diversified miner; No. 1 fertilizer maker Potash Corp. of Saskatchewan Inc.; Goldcorp Inc., one of the world's largest gold miners; and mid-tier gold miner Agnico-Eagle Mines Ltd.
All will inform on the state of the global commodities cycle – although in slightly different ways – and on how they are dealing with booming costs.
Vancouver-based Teck is one of the world's largest exporters of coking coal used in steel production. As a major supplier to Chinese markets, the company will be watched for insight into how demand is faring at the Asian giant as its economy grows at a slower pace. RBC Dominion Securities Inc. said in a research note that it expects the company to report sequentially weak earnings amid soft coal volumes.
"Given recent coal market weakness, we believe that significant risk exists that in addition to softer coal prices, Teck could lower its coal production guidance for the year," the bank's capital markets arm said in the report.
Teck reports its third quarter on Wednesday before the market opens. Potash Corp. reports a day later and is expected to elaborate on a recent cut in its profit outlook amid delays in signing key contracts with China and India.
Miners reporting this week will be watched for how they are dealing with booming costs at a time when economic stimulus measures around the world gave prices for some metals a kick after many months of sideways movement. "A new and open-ended round of quantitative easing has provided positive momentum to metals prices in spite of uncertain growth prospects in Europe and China," analysts at BMO Nesbitt Burns Inc. wrote in a Oct. 15 report.
Gold stocks are rising after nearly a year in the doldrums, helped by higher gold prices and as they pledged to focus on returning more profits to shareholders instead of spending on increasing production. Goldcorp reports Thursday before the market opens. Agnico-Eagle reports on Wednesday.
"What people are looking for is dividends and free cashflow," said Lloyd O'Carroll, an analyst with Davenport & Company LLC. "What are the fundamental earnings and cash generation and the metals of these companies and these stocks."
(Editor's note: An earlier version of this article incorrectly stated that Agnico-Eagle reports results on Thursday.)