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Scotia Lawrence Smith takes tops overall for earnings estimate accuracy

A worker taps into the copper stream at BHP Billiton's Olympic Dam smelter.

Lawrence Smith figures that 2009 was the toughest year to forecast company profits as the stock market kept sinking until spring before recovering sharply.

"It was really a year of two halves," said the Scotia Capital Inc. analyst, who was ranked No. 1 in this year's StarMine analyst awards for overall earnings estimate accuracy.

"Commodity prices were under significant pressure, and earnings estimates were coming down fairly quickly [in the first half]" recalled Mr. Smith, who covers metals and mining as well as some uranium stocks. "In the second half of the year, the reverse happened."

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The analyst, who has been in the business for 13 years, said his team were "ahead of the pack" in terms of lowering estimates in the first half. "We are doing our own commodity price forecasting so it means we can adjust our estimates quickly," he said.

Mr. Smith doesn't expect strong profit growth this year. "We would expect a gradual recovery in the second half of the year because of the global economy moving back into sustainable growth," he said. "We are generally forecasting fairly modest earnings because we are in a transition mode."

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