What happened
Shares of South Africa's Harmony Gold Mining Company (HMY +5.25%) soared 12.4% through 12:20 p.m. ET after the company issued a pre-earnings announcement for full-year fiscal 2023, ended June 30.
NYSE: HMY
Key Data Points
So what
South African law requires that companies issue such announcements whenever they have "a reasonable degree of certainty" that one year's results will differ by at least 20% from the previous year's results -- and that's the case here.
Boasting that the company has hit the upper end of previous production guidance for producing between 1.4 million and 1.5 million ounces of gold at a cost of less than 900,000 South African Rand per kilogram (that's $48,687 per kilo, or about $1,391 per ounce), and noting that gold prices have proven higher than previously predicted, Harmony issued new guidance for this fiscal year. Earnings per share are now expected to flip from a loss last year to a profit this year. Specifically, earnings per share should range from 763 to 798 South African cents, or $0.43 to $0.45.
Furthermore, headline earnings per share (EPS) should be even higher than that -- anywhere from $0.43 to $0.50 -- up 30% to 50% year over year.
Now what
That's a pretty big bump. Even valuing Harmony stock by the more conservative basic EPS estimate of $0.43 to $0.45 per share, this would appear to blow right past analyst forecasts for earnings this year, which hover around $0.36 per share. Should Harmony end up earning only $0.43, this gold mining stock will have a P/E ratio of no more than 9.3 -- and if Harmony earns $0.45, the stock could be as cheap as 8.9 times earnings.
That's not bad for a stock that is apparently, for now at least, growing earnings at 30% to 50% year over year. And with analysts forecasting even stronger earnings growth over the next two years, the boom times could just be beginning for Harmony Gold.
