GDX VanEck Gold Miners ETF

As long as the price of gold continues to drift lower, it seems earnings expectations for miners of the yellow metal are following its decline. And in the high-risk metal mining industry, costs can quickly escalate too.

This week, Agnico-Eagle Mines (AEM) dropped to a Zacks #5 Rank as analyst 2013 EPS estimates have fallen from $2.44 to $2.04 in the past 60 days. And downward revisions have taken the full-year 2014 down to $2.36 from $2.80.

Agnico-Eagle Mines Limited is a Toronto-based gold producer with operations in Canada, Finland and Mexico. The company's LaRonde mine in Quebec is one of Canada s largest operating gold mines by gold reserves and has provided the company s foundation for domestic and international expansion.

Profits Again, But Rising Costs

The company missed expectations in fourth-quarter 2012 with both revenues and adjusted earnings falling short of the Zacks Consensus Estimate. But this was a welcome return to profitability from a year ago.

On a reported basis, the company turned to a profit of $82.8 million or $0.48 per share in the quarter compared with a loss of $601.4 million or $3.53 per share a year ago. The bottom line in the year-ago quarter was hit by $907.7 million of impairment charge at their Meadowbank mine in northern Canada.

For full-year 2012, the company posted a profit of $310.9 million $1.81 per share versus a loss of $568.9 million or $3.36 per share in 2011. The hefty impairment loss coupled with production suspension at the Goldex mine crimped the bottom line in 2011. Adjusted earnings of $1.87 per share fell behind the Zacks Consensus Estimate of $2.12.

While Agnico-Eagle maintains a solid exploration budget and is reinvesting in its assets to expand output, any potential delay associated with the development projects may jeopardize its future production.

And here's the view of future profits according to the analysts...