The equity market's gotten a big boost by earning surprises such as last Thursday's early profit report from Wells Fargo & Co. (NYSE: WFC). The Dow Jones Industrial Average spiked 250 points, or 2%, on the news that the bank expected a $1 billion increase from year-ago earnings.

With earnings season ramping up, the chattering classes are deep in speculation about the next big surprise on the horizon. Goldman Sachs' number came as a surprise Monday, but there was a strong hint a couple of weeks ago from a rather surprising quarter - gold mining.

Gammon Gold, Inc. (NYSE: GRS), a Nova Scotia-based operator of two Mexican mines, whiffed the green eyeshade set with a March 25 release showing earnings 40% higher than forecast. The surprise contributed to a 4% one-day spike in the NYSE Arca Gold Miners Index.

Presently, there's a freshening breeze blowing at the back of gold stocks that's pushing the sector's performance ahead of bullion's. Since the equity market turned buoyant five weeks ago, gold stocks have gained nearly 7%, while bullion prices slumped 3%. That performance differential has been reflected in the shrinking price multiple of the SPDR Gold Shares Trust (NYSE Arca: GLD) over the Market Vectors Gold Miners ETF (NYSE Arca: GDX). The ratio, which peaked at more than 4-to-1 when the banking crisis broke open, has been since nearly halved.

Gold (GLD)/Gold Stock (GDX) Ratio

One has to wonder about the likelihood of more earnings surprises like Gammon's. Earnings are notoriously volatile for gold miners. So, too, is the degree to which analysts' projections over- or undershoot the companies' actual profits.

More than a third of the constituents of the NYSE Arca Gold Miners Index are due to report earnings in the coming month. The earnings track record of the 10 largest, each with a market capitalization over $1 billion, may provide us the means for handicapping the odds of earnings surprises this season.

In the last quarterly go-around, covering 2008's fourth quarter, six out of the top 10 miners produced greater-than-expected earnings, a vast improvement over the preceding two quarters when only one issue beat Street estimates.

The three largest producers all cranked out single-digit surprises. Barrick Gold (NYSE: ABX) outdid forecasts by nearly 7%, Goldcorp Inc. (NYSE: GG) bettered fourth-quarter expectations by more than 9% and Newmont Mining Corp. (NYSE: NEM) earned 4% more than projections. Smaller companies - Yamana Gold, Inc. (NYSE: AUY), Silver Wheaton Corp. (NYSE: SLW) and Royal Gold, Inc. (Nasdaq: RGLD) - cranked out disproportionately larger surprises, in part because of their smaller EPS baselines.

The median surprise number in the fourth quarter was a positive 5.4%, but that belies the tremendous variance among the 10 issues' performance. The quarter's mean surprise number was, in fact, a negative 38.7%, brought low largely because of an outsized loss cranked out by AngloGold Ashanti Ltd. (NYSE: AU). AngloGold has been one of the more volatile earners in the index's top 10. Three quarters earlier - that is, the period ending March 2008 - the company's earnings outperformance put it well ahead of the other three firms then beating analysts' expectations.

Gold miners delivered less-than-stellar results in the June and September 2008 quarters: Just one company outperformed guesstimates in each of those periods.

Only three miners have, in fact, managed to crank out positive mean earnings surprises over the past four quarters: Newmont Mining, Yamana Gold and Royal Gold. Given the variance in market conditions over the past year, though, a better baseline can be developed by using an exponential moving average (EMA) of earnings surprises. An exponential average weights recent results more heavily than those of the more distant past. Gauged by EMA, fully half of our top 10 companies exhibit a positive trend.

If we adjust the current Street estimate for each company by the EMA of earnings surprises, we can get an idea of likely numbers, assuming these companies produce trend line profits.

No guarantees, of course.

NYSE Arca Gold Miners Index Constituent Earnings Horizon

The Street's looking for $2.44 in earnings out of these 10 companies, but our model says the trend line surprise number is more likely 89 cents; 63.5% less than expectations.

Here's where we have to season our probability stew with that proverbial grain of salt. Nothing, of course, says earnings have to perform to the trend line. And even if they did, do you trust the trend line? After all, AngloGold's recent under-performance is a B-I-G drag on the bottom line. If we discount AngloGold altogether we, in fact, end up with a positive 6.4% aggregate earnings surprise.

Forecasting earnings, as many analysts know, is part art and part science. The science bit subjects the reality of a company's financial data to mathematical manipulation. As for the other part, well, perhaps French playwright Francoise Sagan said it best: "Art must take reality by surprise."